The total market capitalisation of BSE-listed companies touched a new high of Rs 160.68 trillion on Friday, led by Reliance Industries (RIL), information technology (IT), and pharmaceutical stocks. Investor wealth of BSE-listed firms, measured by market capitalisation (m-cap), saw a previous record high of Rs 160.57 trillion, scaled on January 17, 2020, the BSE data shows.
At 02:40 pm, the benchmark S&P BSE Sensex traded at 40,526 points. The index is just 4 per cent away from its all-time high level of 42,273.87, touched on January 20, 2020. The S&P BS Sensex, however, ended the day at 40,509 levels - up 327 points, 0.8 per cent. On the other hand, the S&P BSE Midcap and the S&P BSE Smallcap index are over 20 per cent away from their respective record high levels hit during January 2018.
RIL steals the show
In absolute terms, Reliance Industries, which was trading close to its record high level, contributed Rs 4.67 trillion to the m-cap since January 17 level. The top four IT companies -- Tata Consultancy Services (Rs 2.25 trillion), Infosys (Rs 1.42 trillion), HCL Technologies (Rs 70,243 crore), and Wipro (Rs 69,969 crore) -- have collectively contributed Rs 5.08 trillion m-cap rise during the period.
Ten pharmaceutical companies including Dr Reddy’s Laboratories, Divi’s Laboratories, Cipla, Aurobindo Pharma, and Biocon have collectively added Rs 2 trillion m-cap, while, Adani Green Energy, Hindustan Unilever, Asian Paints, and Tata Consumer Products are among notable companies added a combined Rs 1.75 trillion m-cap since January 17.
"A 14 per cent (US$) rise over the past three months has placed India among the top emerging market (EM) performers. While the Indian market is still down YTD by around 2 per cent, it is substantially better than other EM, excluding China which is down over 10 per cent. Interestingly, Indian financials, though lagging vis-a-vis the benchmark, have performed substantially better than EM financial index and are the fourth best among 14 large EMs on a one-month and three-month basis. We believe financials are an attractive play on India's economic improvement," wrote Mahesh Nandurkar, managing director and head of India research at Jefferies in an October 8 co-authored note with Abhinav Sinha.
The six recently listed companies which include SBI Cards and Payment Services, Computer Age Management Services (CAMS), and Happiest Minds Technologies, added Rs 1.01 trillion in total m-cap, also led the BSE m-cap to hit a new high.
Only 177 stocks from the S&P BSE500 index were trading above their January 17 levels, despite the market cap hitting a new high today. Out of 323 stocks, 19 scrips have seen their market valuation more-than halve, including IndusInd Bank, Canara Bank, Punjab National Bank, Bank of Baroda, Future Retail, and SpiceJet. While a total of 135 stocks declined in the range of 25 per cent to 50 per cent.
Going ahead, analysts feel that the market can fully recover its losses triggered by the Covid-19 pandemic. After hitting the bottom on March 23, markets have made a sharp recovery over the past six months, although with intermittent interruptions. Over this period, the while the Nifty has gained around 50 per cent, the broader market has outperformed with the midcap and small-cap indices rallying around 55% and 75%, respectively.
"Our analysis of past market corrections suggests midcap falls tends to be sharper and take longer to recover However, midcap begin to outperform largecap in the later stage of recovery. Given the strong outperformance witnessed in smallcap and midcap indices recently, we believe this as a sign of market being ready to fully recover its losses from the COVID-19 crash," said Pradeep Kumar Kesavan, senior vice-president for equity strategy at Elara Capital.