On Tuesday, India’s market capitalization surpassed $5.5 trillion for the first time, just over two months after it initially exceeded $5 trillion. This achievement reflects strong market performance, even as the benchmark indices remained relatively stable for the second consecutive day. By the end of Tuesday’s trading session, the total market capitalization of all BSE-listed companies reached Rs 461 trillion (approximately $5.5 trillion).
India’s market capitalization first crossed $5 trillion on May 24, 2024, according to Bloomberg data. The market had reached the $1 trillion mark on May 28, 2007, and it took another decade to double that figure. Since then, the pace of reaching new milestones has accelerated: it took around four years to reach $3 trillion, less than two years to hit $4 trillion, and just six months to achieve $5 trillion.
The recent growth to $5.5 trillion can be attributed to India’s economic stability and strong performance during a period of global financial uncertainty. The surge in domestic investment post-pandemic, coupled with the return of foreign portfolio investors (FPIs) since June, has significantly contributed to this increase. However, market experts advise caution due to high valuations, particularly in the mid and small-cap sectors. Chokkalingam G, founder of Equinomics, noted that while the overall index remains stable, a correction in mid and small caps is likely imminent. Over the past year, mid- and small-cap stocks have increasingly contributed to the overall market capitalization.
Earlier this year, India surpassed Hong Kong to become the world’s fourth-largest stock market, and it has since extended its lead over the city-state.
