BSE market cap touches ₹280 lakh crore after a steep 18% rally in the last two months

• Sensex has crossed ₹280 lakh market cap, beating its previous all-time high achieved in January this year.
• The recent rally in Nifty 50 and Sensex has resulted in investor wealth increasing by nearly 18%.
• Analysts recommend skeptical investors to book profits amidst volatile geopolitical concerns causing global economic headwinds.

The total market cap of BSE crossed ₹280 lakh crore, thanks to the 18% rally that the markets saw in the last two months.

The rally eclipsed even its previous high from January. BSE’s benchmark index Sensex too crossed the 60,000 mark for the first time in four months this week.

BSE market cap also benefited from two major IPOs – LIC and Adani Wilmar this year. Together, they added nearly ₹5.4 lakh crore to the exchange.

“Recent gains in Indian indices have been helped by a combination of factors including encouraging macro data, fall in commodity prices, slowing inflation that may lead to central banks globally softening their monetary policy stance earlier than expected,” said Dhiraj Relli, MD & CEO of HDFC Securities, explaining the current rally in Indian stock markets.

However, not everyone may be as optimistic about the steep rally, and Relli suggests those people should book some profits.

“The investor may take appropriate action to review their portfolio and take some profit off the table in the coming few weeks,” he added.

Amongst the world’s major indices, only Nasdaq has given better returns than Nifty 50 and Sensex in the last two months.

Global economic headwinds could play spoilsport

Economic headwinds across the globe – and specifically in India’s neighborhood could also play spoilsport.

Concerns on the Russia-Ukraine war continue to be a major contributor to inflation, with US Fed’s James Bullard stating that it is too early to say inflation has peaked.

Bullard says he expects another 75 bps rate hike in September – and RBI could follow in the US Fed’s footsteps, and this could be another factor to consider to understand which way the markets will swing.

Jefferies’ Christopher Wood said that the macro environment remains stagflationary. He recommends maintaining an exposure to energy and gold.

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