Investors richer by Rs 110.57 trn so far in 2024 amid high rally in markets

Investors' wealth surged by a whopping Rs 110.57 trillion so far this year, driven by a remarkable rally in the stock market, where the benchmark indices shattered many records.

The market capitalisation of BSE-listed firms soared Rs 110,57,617.4 crore to Rs 4,74,86,463.65 crore ($ 5.67 trillion) so far this year. The market valuation of all listed firms at the BSE hit an all-time high of Rs 477.93 trillion on September 27.

The BSE Sensex jumped 12,026.03 points or 16.64 per cent so far in 2024, giving handsome returns to investors. The benchmark scaled its all-time peak of 85,978.25 on September 27, this year, breaching many milestones.

Analysts attributed the sharp rally in the markets to robust domestic liquidity along with strong fundamentals of the Indian economy.

"One of the key highlights of this year is the robust domestic liquidity, driven by record inflows into the mutual fund industry," said Santosh Meena, Head of Research, Swastika Investmart Ltd.

Despite selling pressure from FIIs (Foreign Institutional Investors), the Indian equity markets reached record highs, delivering solid gains, he said.

"Notably, the midcap and smallcap indices outperformed and several stocks turned into multibaggers, rewarding retail investors handsomely," Meena added.

At the beginning of the year, the BSE Sensex was at 72,271.94 level and the benchmark gauge is now at 84,266.29.

Overall, 2024 has been an outstanding year for retail investors, marked by strong market performance, especially in midcaps and smallcaps, backed by domestic liquidity and resilience in the face of FII outflows, he said.

The BSE midcap gauge has surged 12,645.24 points or 34.32 per cent so far this year, while the smallcap index soared 14,777.09 points or 34.62 per cent.

"The sharp rally in recent weeks was the outcome of Fed rate cut and hopes that RBI would also follow suit in its policy meeting," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

The 30-share BSE benchmark ended above the 83,000-level for the first time on September 17. It ended above the historic 84,000-mark for first time on September 20. The benchmark finished above the 85,000-level on September 25.

"Global markets, despite ongoing geopolitical tensions, have also been supportive. A significant positive trigger for emerging markets like India has been the beginning of the interest rate cut cycle in the US.

"This has boosted investor sentiment and liquidity flow into riskier assets. Additionally, crude oil prices remained relatively low throughout the year, despite geopolitical uncertainties, providing further support to the Indian economy by easing inflationary pressures and improving the market outlook," Meena added.

In 2023, the BSE benchmark had jumped 11,399.52 points or 18.73 per cent.

Dalal Street investors added Rs 81.90 trillion to their wealth in 2023.

The combined market valuation of all listed companies on the leading stock exchange BSE reached the $ 4-trillion milestone for the first time ever on November 29 last year.

The market capitalisation of BSE-listed firms hit the $ 5-trillion mark on May 21 this year.

Reliance Industries is the country's most valued firm with a market valuation of Rs 19,82,265.88 crore, followed by TCS (Rs 15,50,820.85 crore), HDFC Bank (Rs 13,16,818.45 crore), Bharti Airtel (Rs 9,67,295.41 crore) and ICICI Bank (Rs 8,98,320.22 crore) in the top five order.

On the road ahead for the equity markets, Meena said, "As we approach the US elections and navigate ongoing geopolitical uncertainties, the market may experience a time-wise correction and price corrections in certain segments. However, sector and stock-specific opportunities will continue to emerge, driven by the strength of domestic liquidity.