India's market capitalisation below Rs 400 trillion, lowest since June 2024

India's market capitalization had surpassed ₹400 trillion for the first time on April 10 and peaked at ₹477.93 trillion on September 29

BSE-listed companies' market capitalisation (mcap) dipped below Rs 400 trillion on Friday amid a broader market selloff. Although it recovered slightly to Rs 400.2 trillion at close, this marks the lowest level since June 6, 2024. 

India’s market capitalisation had surpassed Rs 400 trillion for the first time on April 10 and peaked at Rs 477.93 trillion on September 29. Since then, approximately Rs 78 trillion has been wiped off the market. 

In dollar terms, India’s market capitalisation has fallen below $4 trillion, with a loss of $1.2 trillion from its peak, according to Bloomberg calculations. Over the past five months, India’s market has experienced the most significant value erosion among major markets. According to BSE and NSE data, India’s mcap in dollar terms is around $4.6 trillion. 

 

The crux of the sharp downturn is sharp selling by foreign portfolio investors (FPIs) and earnings disappointment by India Inc. The year-to-date selling by foreign portfolio investors (FPIs) has now topped Rs 1 trillion. 

“Growth is slowing, while elevated US bond yields and forex pressure is keeping foreign investors on edge,” said Herald van der Linde, head of equity strategy, Asia Pacific, HSBC. 

“We think India’s premium multiple valuation will remain under pressure until earnings stabilise. Third-quarter results were below estimates, even amid the backdrop of lowered expectations. Growth is likely to remain weak for at least two quarters before the lower base or potential policy impact kicks in.