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NSE and BSE market cap to cross $10 trillion by 2023: Experts

NSE and BSE market cap to cross $10 trillion by 2023: Experts
By creating an unprecedented wealth of USD 1 trillion in just 6 months, both indices of the Indian stock market BSE and NSE have joined the exclusive USD 5 trillion club, defying the FII (Foreign Institutional Investors) pull out before the outcome of the Lok Sabha election on June 4.

BSE and NSE journey from USD 4 trillion in November 2023 to USD 5 trillion this week took less than six months. The pace of such wealth creation has been never seen before in the history of the Indian market.

Data shows this leg of the bull run is fuelled by domestic institutional, retail and HNI (High Net worth Individuals) investors as FIIs have pulled out at least Rs 28,000 crore from the market this month.

Market experts say, assuming market returns in line with the last 10 to 20 years, and with the expectation of India becoming the third-largest economy by 2027, the market cap of BSE and NSE is expected to reach USD 10 trillion by 2030.

Market expert Ajay Bagga says, scale begets more inflows and initiates a virtuous circle of investment and market returns and said "There is a good chance of both NSE and BSE listed companies market cap crossing USD 10 trillion by or before 2030 amid huge growth in FDI and FPI flows on the back of the favourable economy"

He added "By the end of 2024, there is a good chance of the Indian markets being around USD 5.5 to 5.75 trillion. As the major Indian sectors like Financials and IT pick up traction, the Indian market cap will gallop faster. Listing of more unlisted companies will also add to this growth. With 130 Unicorns, India has a massive pool of potential listings that will increase the market cap further".

If we see the journey of market capitalisation of listed companies, it took 10 years to reach from USD 1 trillion to USD 2 trillion but less than 6 months to reach USD 5 trillion from USD 4 trillion.

History of Indian Stock Market Capitalization:

-USD 1 Trillion: May 2007

-USD 2 Trillion: July 2017 (10 Years)

-USD 3 Trillion: May 2021 (4 Years)

-USD 4 Trillion: November 2023 (2.5 Years)

-USD 5 Trillion: May 2024 (6 Months)

With USD 5 trillion market cap, the Indian stock market is now ranked fifth in terms of market cap in the world. The pace of the jump from USD 4 trillion to USD 5 trillion, despite FIIs pull out has given new confidence to retail investors.

"India's aggregate market capitalization crossing USD 5 trillion mark is driven primarily by continuing strong economic growth and robust corporate performance trend. India is now world's 4th largest in terms of aggregate market capitalization, this signifies the breadth and the depth of Indian listed equity space and its long term potential." Harsha Upadhyaya, CIO - Equity, Kotak Mutual Fund

Experts say the Indian market still has a long way to go if we compare it with leading markets of the world. The US leads with a market cap of almost USD 55.65 trillion, followed by China at a market cap of USD 9.4 trillion. Japan and Hong Kong market caps are about USD 6.42 trillion and USD 5.47 trillion.

"By the FY26, the Nifty index can reach to a level of 24,500-25000 while the Sensex can touch the mark of 80,000-81000" said Shrikant Chauhan, Head equity research, Kotak Securities.

The market has had a volatile patch in the last few weeks amid election-related speculations but the investing community seems to be assured with the comments made by Prime Minister Narendra Modi and Home Minister Amit Shah for getting a comfortable majority for the ruling alliance.

Another market expert Rajesh Palviya says money flow in equities is encouraging and Indian markets can see new heights by the end of the year.

"The broader market is showing bullishness, and we believe this rally can extend further. Nifty likely reach 24000 in the year 2024. There is buying interest in most core sectors, and macro data is improving. Corporate earnings are on an upward trajectory, and tax collections are showing a good uptick. Money flow into the equity market is quite encouraging. We expect the Sensex to extend its gains, and we could see the Sensex reach 78000-79000 by the end of 2024" said Rajesh Palviya, SVP Research (Head Technical & Derivative), Axis Securities.

Experts say with the expectation of a stable government at the centre, push for reforms, new listings and rising retail investors Indian markets will see new heights.

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