MUMBAI:
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As the Indian market rallied on the back of the resolution of the US government debt default crisis and its market cap went up to $3.3 trillion (Rs 286.6 lakh crore), the country regained its spot as the fifth biggest stock market in the world.
At the current level, India’s market cap is at almost a five-month high. The rally in the Indian market over the last two months, helped mainly by strong foreign fund buying on the back of stable macroeconomic fundamentals and weakness in China, put it ahead of France – which on Friday had a market cap of $3.2 trillion, data from Bloomberg showed. The top four spots in the market cap league table are taken by the US at $44.5 trillion, China $10.3 trillion, Japan $5.7 trillion and Hong Kong $5.1 trillion.
On Monday, the feel-good rally also took the sensex above the 63,000 mark after nearly six months. The sensex opened at 62,802 points, up about 300 points, rallied to an intra-day high of 63,026 points, but closed a tad lower from its near-six-month-high figure at 62,846 points, up 345 points, or 0.6%.
Sensex climbs 6.5% since Mar 31, MCap up over 9%
Since March 31, the sensex has risen by 6.5%, while India’s market cap has risen by a little over 9% from Rs 261.8 lakh crore on that day. During the same time, foreign funds have net infused nearly Rs 50,000 crore into Indian stocks, data from BSE and CDSL showed.
According to a Bloomberg report, a large part of this rise was due to the strong revival in the stocks of Adani group companies, which were beaten down badly since January 25 after a US-based short-seller accused the group of several acts of corporate malfeasance. Last week the group added about Rs 1.2 lakh crore to its combined market cap.
According to market players, lately India has also been the recipient of a large chunk of foreign investments since economic recovery in China has been much below par than was estimated by analysts and fund managers after it opened up post its two-year long severe lockdown during the Covid pandemic. Last week Christopher Wood of Jefferies Financial Group raised the weight of Indian stocks in its Asia Pacific ex-Japan model portfolio to reflect the disappointments in the Chinese stock market after a strong rally earlier this year, a Bloomberg report said.
Domestically, India is poised to show a strong economic growth of nearly 7% for the fiscal 2023 and about 5% for the January-March quarter when the government publishes the GDP numbers on May 31. Investors and fund managers also point to record GST collection numbers and the falling inflation rates as two more fundamental indicators that put India on a strong position. According to Siddhartha Khemka, head-retail research, Motilal Oswal Financial Services, the Indian markets edged higher following global optimism after the US government reached a tentative agreement to raise its debt ceiling and avert a default. “Broader markets along with all the major (sectoral indices) too ended in green. Only oil & gas and IT closed lower.”
“We expect the uptrend in (the Indian market) to continue and expect it to head toward its life-high levels on the back of positive global cues, consistent FIIs buying, and healthy corporate earnings,” Khemka said.
