Market cap zooms to record Rs 12.25 trillion

The market capitalisation of stocks traded on the Indian bourses touched an all-time high of Rs 1,225,000 crore (Rs 12.25 trillion), improving on the earlier record high of Rs 1,218,000 crore (Rs 12.18 trillion) posted on February 21, 2000. This is roughly 54 per cent of India's gross domestic product.

Slide Show: Rise and rise of the Sensex

The National Stock Exchange's S&P CNX Nifty closed at a new high of 1,778.55, while the Bombay Stock Exchange Sensex pierced the 5,500-mark to touch yet another new 45-month peak of 5,541.35.

The New York Stock Exchange tops the global chart with a market capitalisation of $11 trillion. The Nasdaq is a distant second with a market capitalisation of $3.3 trillion followed by Tokyo ($2.50 trillion), London Stock Exchange ($2.20 trillion), Pan-European Exchange ($2 trillion) and Germany ($1 trillion). In dollar terms, the combined market capitalisation of the BSE and NSE works out to $269 billion.

The rally, which began on April 25 this year, added a record market capitalisation of Rs 651,000 crore ($143 billion) in the last eight months.

During the period, the Sensex rose 89.5 per cent and Nifty 92.4 per cent. The number of companies with a market capitalisation of over $1 billion increased from 27 on April 25 to 48 today.

The character of the ongoing market rally is also different. The 1991-92 boom was led by big bull Harshad Mehta, who manipulated stocks to take the Sensex past 4,000.

In 1999-2000, the convergence sector played havoc worldwide and the technology boom took the Sensex past the 6,150-mark.

The current rally has, however, been widespread with participation from all sectors. Foreign institutional investors are playing a key role in the boom with a net investment of over $6 billion in the equity market alone.

Index heavyweights such as Reliance Industries, State Bank of India and Hindustan Lever contributed to the gains on the Sensex today.

Advances beat declines 1,018 to 869 on the BSE with heavy volumes of 223 million shares, compared with 202 million shares traded on Thursday.

L&T jumped 8.3 per cent to Rs 498.25 on speculation that a proposed selloff of its cement unit will be approved soon.

Automobile stocks surged on expectations of strong earnings in the current quarter. Hero Honda Motors gained 3.6 per cent at Rs 412.05, while Bajaj Auto went up 1.8 per cent to Rs 1,100.

Technology stocks tracked overnight gains on the Nasdaq. Infosys gained 2.6 per cent at Rs 5,255.85, while Satyam Computers rose 1 per cent to Rs 354.65. The American Depository Receipts of Infosys and Satyam rose 1.1 per cent and 5.67 per cent, respectively.

In the current boom, the refinery sector has displaced the infotech sector with a 18.15 per cent share in the total market capitalisation, up from 4.20 per cent in February 2000.

The infotech sector ranks second with a share of 10.66 per cent (39.93 per cent), followed by banks 7.73 per cent (3.12 per cent), pharmaceuticals 7.45 per cent (4.61 per cent), metals 5.10 per cent (1.18 per cent) and FMCGs 4.96 per cent (6.24 per cent).