The total valuation of all companies listed on the Bombay Stock Exchange has exceeded Rs 465 lakh crore, achieving its peak in 11 months. This increase was driven by a broad market rally and renewed expectations surrounding the revival of India–US trade discussions, along with a potential interest rate cut by the US Federal Reserve. The current valuation is only 2.7 percent below the all-time high recorded on September 27, 2024, with nearly Rs 20 lakh crore added since early September. The anticipated easing by the Reserve Bank of India (RBI) in October also enhanced investor confidence, particularly as domestic inflation showed indications of declining.
The benchmark indices, Sensex and Nifty, advanced by approximately 3.5 percent this month, narrowing the gap to the record highs observed on September 26, 2024. State-owned enterprises significantly contributed to this recent surge, propelling the BSE PSU Index up by 7.5 percent, while the BSE 500 increased by 5 percent. The BSE Auto sector rose by 9 percent, BSE Bankex by 6.8 percent, BSE Metal by 8.1 percent, and Oil & Gas by 4.5 percent. Mid-cap and small-cap stocks also performed well, with the BSE MidCap index climbing 4.7 percent and SmallCap rising by 6 percent. Analysts suggest that the Indian stock market is likely to remain unaffected by decisions made by the US Federal Reserve.
They attribute the current market rally to anticipated earnings recovery among Indian corporations. Market observers predict a strong likelihood of over 15 percent growth in corporate earnings for FY27, fueled by GST reforms, which may positively influence foreign portfolio investor sentiment. However, some analysts caution that while valuations are high, earnings growth is expected to improve, particularly in the banking, non-banking financial companies, and consumption sectors. Moreover, the Nifty 50 remained above the 25,300 level in the last session, reinforcing psychological resilience and indicating investor confidence at elevated levels.
