Comeback trail: India retraces path to $5 trillion market capitalisation

Over the past one week, India has emerged as the top-performing major market globally

The total market capitalisation (mcap) of BSE-listed companies crossed $5 trillion for the first time since early January, driven by a record-breaking five-day rally. Over these sessions, the market value of domestic firms surged by nearly half a trillion dollars. However, India’s mcap remains $700 billion below the peak of $5.7 trillion recorded on September 27, 2024. 

Over the past week, India has emerged as the top-performing major market globally. The optimism stems from India’s insulation from global trade disruptions due to its limited goods exports to the US, which account for just 1 per cent of the GDP. The country’s macroeconomic environment is benefiting from falling oil prices, a weaker US dollar, and expectations of further interest rate cuts.  Globally, India now ranks as the fifth most valuable market, surpassing the UK and Canada. Among emerging markets (EMs), it is the most expensive, trading at 21 times its estimated 12-month forward earnings—well above its 20-year average of 17.5x, and the average recession trough of 9.7x. In contrast, EM peers like South Korea, Taiwan, and Japan are trading near their average recession trough valuations.