The market capitalisation of companies listed on the BSE has soared to a historic milestone, surpassing $5 trillion for the first time. This comes at a time when benchmark indices are witnessing increased volatility owing to global market trends and the ongoing electoral season.
Last year in November month, the total market capitalisation of BSE-listed companies hit $4 trillion. Presently, just four other global stock markets boast market capitalisations above $5 trillion. USA has the highest cap followed by China, Japan, and Hong Kong.
While recent market movements has given rise to uncertainty owing to the upcoming elections results coupled with the FII selloff, broader market sentiment remains positive.
Earlier this week, Prime Minister Narendra Modi made a statement that markets will witness a bull run post-election, hinting at a possible rally. “You will see that in one week within June 4, the day election results would be declared, market participants would get tired,” he said in an interview with NDTV.
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Meanwhile, the market watchdog recently revamped the method for calculating the market capitalisation of listed companies under the Listing Obligations and Disclosure Requirements (LODR) rules.
Instead of using the market capitalisation of a single day (currently March 31), listed companies will now use the "average market capitalisation" for a six-month period.
Market experts believe the market capitalisation of a listed entity keeps fluctuating on a daily basis based on market dynamics and, therefore, an average of market capitalisation figures over a reasonable period of time (six months) would more accurately reflect the market size of the listed entity and consequently the ranking, vis-a-vis its peers.
(With Inputs from PTI)
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