on Friday recorded all-time highs, with the Sensex closing at 33,940 and the Nifty ending slightly shy of 10,500. India’s total m-cap topped Rs 150 lakh crore ($2.4 trillion) for the first time.
Domestic stocks added a whopping Rs 44.44 lakh crore ($860 billion) to market value this year. India, which overtook Canada, could soon become the world’s sixth-biggest market in terms of m-cap.
This year’s rally has been quite broad-based, with the mid- and small-cap indices outperforming the blue-chip Sensex. The only caution in this fairy tale is that India’s m-cap-to-GDP ratio has climbed to 95 per cent, up from 72 per cent a year ago.
Moreover, it has largely been driven by valuation re-rating in the absence of earnings growth. If the economy and corporate earnings don’t pick up, the markets
would continue to look even more expensive.