The India stock market, helped by its largest companies which play a key role in the performance of its exchange-traded fund (INP), passed the historical mark of surpassing $1 trillion in market value.
According to the Bombay Stock Exchange, the total market capitalisation of India's stocks this week reached Rs40,811bn or $1,009bn with the rupee trading at Rs40.45 to the dollar, market capitalisation at the close was $1,009bn. The Financial Times reports that The Bombay Sensitive Index, a basket of 30 large and liquid stocks, yesterday closed up 110 points, or 0.77 per cent, at 14,508. It has trebled in three years.
The exchange is now the 14th largest in the world but a recent Morgan Stanley study offerd a cautionary note since big stocks contributed most of the returns. Surprisingly, two-thirds of stocks have shown negative returns in the past 12 months. "India is likely to under-perform its peer group due to concerns on inflation and hence growth," Morgan Stanley said. "The absolute direction of the market is still a function of global risk appetite."
By Carl Delfeld of the Chartwell ETF Advisor
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