All in a year: Equity market investors turn richer by `81.90 lakh crore in 2023
New Delhi: In a memorable year for the equity market, Dalal Street investors added a whopping Rs 81.90 lakh crore to their wealth in 2023 as a raft of positive factors powered a stellar rally in stocks.
Experts said India’s strong macroeconomic fundamentals, political stability owing to the BJP’s success in recent elections in three significant states, optimistic corporate earnings outlook, signals from the US Federal Reserve about three prospective rate cuts next year and heavy retail investors participation played a major role in fuelling the stock market
rally in 2023.
In the year 2023, the 30-share BSE Sensex jumped 11,399.52 points or 18.73 per cent.
The market capitalisation of BSE-listed companies climbed sharply by Rs 81,90,598.32 crore this year to reach an all-time high of Rs 3,64,28,846.25 crore.
The Indian market has demonstrated resilience, emerging as one of the standout performers within the broader emerging markets basket, Sunil Nyati, Managing Director of Swastika Investmart Ltd, said.
According to him, 2023 is not just a good year for the Indian stock market but also a triumph for retail investors.
“Retail investors, no longer prone to panic during corrections, are confidently holding onto their investments, ready to ride the wave of India’s economic ascent,” he added.
Indian equities added another feather to its cap as the combined market valuation of all listed companies on the leading stock exchange BSE reached the $4 trillion-milestone for the first time ever on November 29 this year.
“The surge can be attributed to a confluence of factors: the impending elections fostering political stability, promising whispers of rate cuts in 2024, and a much-needed decline in energy prices, finally enticing foreign investors back into the fold. This influx of foreign capital propelled largecap indices to new record highs,” Nyati said.
It took just two-and-a-half years to hit the $4 trillion landmark after the market capitalisation (m-cap) of all listed companies on the BSE touched the $3 trillion-mark on May 24, 2021.
“With the BJP’s sweeping victory in the state elections of Rajasthan, Madhya Pradesh and Chhattisgarh, the confidence of investors regarding political continuity post 2024 Lok Sabha elections has received a big boost. Already, the sentiments were buoyed by a healthy trend in corporate earnings growth and resilient domestic macros, and is now likely to strengthen further.
“This augurs well for macro and policy momentum for India, which, at the moment, is seeing the highest growth among major economies,” according to a note by Motilal Oswal Broking and Distribution.
The BSE Sensex reached its all-time high of 72,484.34 on December 28 after hitting a 52-week low of 57,084.91 on March 20, this year.
The BSE bellwether index made monthly gains in eight while it fell in the remaining four during the year. The months of November and December were the most rewarding in terms of returns. The 30-share BSE benchmark jumped 4.87 per cent in November while in December, it rallied 7.83 per cent.
“India’s strong macroeconomic fundamentals, marked by robust GDP growth, moderating inflation, and a stable rupee, played a crucial role in this resilience. This, coupled with improving global conditions like softening inflation, central bank pauses on rate hikes and continued earnings growth, led to a market rally across Indian indices,” Sampath Reddy, Chief Investment Officer at Bajaj Allianz Life
Insurance, said.
