Investors richer by $500 billion

MUMBAI: Investors in Indian equities are richer by half a trillion dollars since the beginning of the year as optimism in the nation’s economic growth story and hope of more reforms from the government lift share prices.

India’s overall market capitalisation, or the value of all shares traded in the country, rose by $503.6 billion (₹3.22 lakh crore) since the beginning of the year, second only to Hong Kong among emerging markets.

Hong Kong shares gained $752.8 billion in 2017, just behind the US market’s $2.38 trillion. Still, among the larger markets India’s growth in percentage terms was the highest at 32.2%.That is almost double the growth in the world’s total market capitalisation.

To be sure, one reason for India’s strong performance among global markets is the rise in the rupee versus the US dollar. Since January, the rupee has gained 5.9% against the dollar, boosting India’s performance when measured in dollar terms.

The fact that overall investor wealth, albeit on paper, grew faster than the benchmark indices shows that the rally in shares has been broad and across sectors and companies. So far this year, the benchmark Sensex and Nifty have gained around 22% each while the BSE small cap index has climbed by nearly a third.

The 32% rise in stock value has boosted the country’s overall market capitalisation beyond $2 trillion. In comparison, India’s GDP for this year is estimated at $2.45 trillion (₹157 lakh crore), according to the International Monetary Fund. Or take India’s total commercial bank deposits, which stand at ₹106 lakh crore.