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What is the story about?
An over 8% rally in the benchmark Nifty 50 over the last six trading sessions, fuelled by a sharp decline in crude oil prices and a reversal in foreign investor flows, has added nearly ₹30 lakh crore to the market capitalisation of BSE-listed companies, taking it past the ₹500-lakh-crore mark for the first time.
At Thursday's close, the combined market capitalisation of BSE-listed companies stood at a record ₹502 lakh crore ($5.31 trillion), up nearly ₹9 lakh crore from the previous session.
While the recent rally has provided a significant boost to investor wealth, new listings have also contributed to the expansion in overall market capitalisation.
The listing of Jio Platforms and the National Stock Exchange (NSE), the country's largest stock exchange, together account for nearly ₹18 lakh crore in market value. In addition, nearly 200 companies that have made their stock market debut so far this year have collectively added another ₹30 lakh crore to the overall market capitalisation.
The latest rally has been driven by a combination of easing geopolitical concerns, falling crude oil prices, a revival in foreign institutional investor (FII) buying and better-than-expected corporate earnings.
Brent crude has declined nearly 19% so far this week, marking its biggest weekly fall since April 2020, and has slipped below the $100-per-barrel mark.
The decline comes as a major relief for India, which meets nearly 90% of its crude oil requirements through imports. Lower oil prices help reduce the country's import bill, ease inflationary pressures, support the rupee and improve the current account deficit. They also benefit oil-sensitive sectors such as aviation, paints and automobiles.
The rupee has extended its gains for a fifth consecutive session, ending Thursday at ₹94.48 against the US dollar, its strongest closing level in 15 days.
Meanwhile, overseas investors, who had been consistent net sellers of Indian equities, have turned buyers, cumulatively purchasing around $4 billion worth of shares over the last 13 trading sessions. The reversal in foreign flows has provided much-needed support to frontline stocks and improved overall market sentiment.
“We are seeing signs of FII flows returning to emerging markets, with Chinese stocks also witnessing a sharp rally. Large frontline stocks are likely to be the focus of foreign institutional investors. Reliance Industries has several moving parts and significant inherent value. It also has refining capacity, which could benefit in an environment of declining crude oil prices,” said Manishi Raychaudhuri, Chief Executive Officer, Emmer Capital Partners.
The improvement in global sentiment has also been supported by growing optimism that the outcome of the US midterm elections could increase political pressure on President Donald Trump to pursue a negotiated settlement to the US-Israeli conflict with Iran. This has helped ease concerns over prolonged geopolitical uncertainty and its potential impact on global energy supplies.
Better-than-expected September-quarter corporate earnings have provided another layer of support to the rally, helping investors look beyond near-term macroeconomic uncertainties.
Shares of Bajaj Finance emerged as the biggest gainer from the Nifty50 firms, rallying 17% over the last six sessions. Shriram Finance and InterGlobe Aviation followed, with gains of around 16% each. Reliance Industries and Jio Financial Services advanced 13.4% and 12%, respectively. Notably, none of the Nifty 50 constituents ended in the red during the six-session winning streak.
Among sectoral indices, the Nifty Realty index led the gains, rising 12.3% over the period. The Nifty Financial Services and Nifty FMCG indices advanced 9% and 8.4%, respectively, while the Sensex surged 8.3%.
At Thursday's close, the combined market capitalisation of BSE-listed companies stood at a record ₹502 lakh crore ($5.31 trillion), up nearly ₹9 lakh crore from the previous session.
While the recent rally has provided a significant boost to investor wealth, new listings have also contributed to the expansion in overall market capitalisation.
The listing of Jio Platforms and the National Stock Exchange (NSE), the country's largest stock exchange, together account for nearly ₹18 lakh crore in market value. In addition, nearly 200 companies that have made their stock market debut so far this year have collectively added another ₹30 lakh crore to the overall market capitalisation.
The latest rally has been driven by a combination of easing geopolitical concerns, falling crude oil prices, a revival in foreign institutional investor (FII) buying and better-than-expected corporate earnings.
Brent crude has declined nearly 19% so far this week, marking its biggest weekly fall since April 2020, and has slipped below the $100-per-barrel mark.
The decline comes as a major relief for India, which meets nearly 90% of its crude oil requirements through imports. Lower oil prices help reduce the country's import bill, ease inflationary pressures, support the rupee and improve the current account deficit. They also benefit oil-sensitive sectors such as aviation, paints and automobiles.
The rupee has extended its gains for a fifth consecutive session, ending Thursday at ₹94.48 against the US dollar, its strongest closing level in 15 days.
Meanwhile, overseas investors, who had been consistent net sellers of Indian equities, have turned buyers, cumulatively purchasing around $4 billion worth of shares over the last 13 trading sessions. The reversal in foreign flows has provided much-needed support to frontline stocks and improved overall market sentiment.
“We are seeing signs of FII flows returning to emerging markets, with Chinese stocks also witnessing a sharp rally. Large frontline stocks are likely to be the focus of foreign institutional investors. Reliance Industries has several moving parts and significant inherent value. It also has refining capacity, which could benefit in an environment of declining crude oil prices,” said Manishi Raychaudhuri, Chief Executive Officer, Emmer Capital Partners.
The improvement in global sentiment has also been supported by growing optimism that the outcome of the US midterm elections could increase political pressure on President Donald Trump to pursue a negotiated settlement to the US-Israeli conflict with Iran. This has helped ease concerns over prolonged geopolitical uncertainty and its potential impact on global energy supplies.
Better-than-expected September-quarter corporate earnings have provided another layer of support to the rally, helping investors look beyond near-term macroeconomic uncertainties.
Shares of Bajaj Finance emerged as the biggest gainer from the Nifty50 firms, rallying 17% over the last six sessions. Shriram Finance and InterGlobe Aviation followed, with gains of around 16% each. Reliance Industries and Jio Financial Services advanced 13.4% and 12%, respectively. Notably, none of the Nifty 50 constituents ended in the red during the six-session winning streak.
Among sectoral indices, the Nifty Realty index led the gains, rising 12.3% over the period. The Nifty Financial Services and Nifty FMCG indices advanced 9% and 8.4%, respectively, while the Sensex surged 8.3%.
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