This is by how much investors are richer as Sensex, other stock indices soar

With Indian stock markets on a never-ending joyride, it is the investors who are getting richer by the day. As benchmark stock indices closed at all-time highs, investor wealth measured by total market capitalisation of all BSE listed firms hit a new record of Rs 156.56 lakh crore. In a spate of twelve months, investor wealth has galloped by Rs 24 lakh crore from Rs 132.5 lakh crore (at the end of Aug-2017). This means stock markets have gained about Rs 10,000 crore in terms of investor wealth for the 242 trading sessions or over Rs 25 crore per minute.

Belying negative expectations, the Indian stock market has continued its northward journey. While worries related to 2019 elections, global trade-wars, currency depreciation, and unfavourable crude oil movement have at times halted the rally, India's macro stability, growth acceleration signals, and strong domestic investor flows have supported equity prices. As a result, investor money regularly keeps chasing stocks and leads to bigger market cap for companies and the overall market.

Across the BSE, there are at least 18 stocks who have gained between 100-800% in last 12 months. Large cap stocks have ruled the roost, delivering mind-boggling returns. For instance, in the last one year, TCS is up 62%, followed by 58% jump in RIL, 51% in HUL, 42% in M&M, 36% in Infosys, 35% in GAIL and 28% in Sun Pharma. With big companies becoming even bigger, the effect on total market capitalisation has been quite significant. Out of the Rs 156.56 lakh crore total market capital for the 3000 firms (actively traded), just top 20 companies contribute Rs 60 lakh crore or roughly 38% of the total pie.

Even amid global turmoil, Indian stocks have often remained calm. "Domestic equity flows are in the midst of a structural uptrend, in our view, resulting in a persistent bid for stocks. FPIs have trimmed their India weight to 2011 lows. India's outperformance could cause FPI (foreign portfolio investor) flows to return. Improving growth underpins a shift in factor performance to growth from quality/value. This is different other places such as the US, where our strategist thinks the market is likely moving from growth to value," Morgan Stanley India managing director Ridham Desai says.

Experts also believe that domestic investors are reaping rich rewards for backing the economy. "What's becoming reasonably clear is that the government would like to see a strengthening economy heading into the elections. The benign inflation data has helped address the overhang of additional rate hikes. Meanwhile, companies have delivered earnings growth in what can be argued were quite adverse circumstances with EM stress, trade war protectionism, volatile and rising crude oil prices. With robust earnings expectations for the second quarter, the market is likely to continue to be bought on weakness," says Sunil Sharma, chief investment officer, Sanctum Wealth Management.

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The Sensex is up 20% compared to one year ago. The strong market performance keeps attracting investors like a magnet. According to BSE, the registered investor count has grown by 50 lakh to 4 crore in last one year, with highest additions coming from Maharashtra, Gujarat, UP, Tamil Nadu and Karnataka. At present, the top-10 investor states are Maharashtra with 8871135 investors, followed by Gujarat 5911242, Uttar Pradesh 2668880, West Bengal 2668167, Tamil Nadu 2665299, Delhi 2479187, Karnataka 2410484, Andhra Pradesh 2241560, Rajasthan 1734233 and Madhya Pradesh 1166340.

TICK BY TICK

• In a spate of twelve months, investor wealth has galloped by Rs 24 lakh crore from Rs 132.5 lakh crore  
• This means stock markets have gained about Rs 25 crore investor wealth per minute

Source: DNA Money