The market capitalization of all listed companies on BSE crossed Rs 400 lakh crore for the first time to hit a lifetime high on April 8, 2024, with the continued rally in blue-chip, mid-cap, and small-cap indices.

BSE achieved a market capitalization of Rs 100 lakh crore first time in March 2014, followed by Rs 200 lakh crore in February 2021. It reached Rs 300 lakh crore milestone in July 2023, and now Rs 400 lakh crore just nine months later.

Since April 2023, BSE-listed firms collectively gained Rs 145 trillion in market capitalization, marking a 57% surge. This growth was fueled by improved high-frequency indicators, strong corporate earnings, positive investor sentiment due to stable policies, and significant domestic and international inflows. Mid and Small-cap indices saw a surge of 60% and 63% respectively, outpacing the 28.6% rise in the Largecap Sensex index. Leading sectors include Realty, PSU banks, Auto, Energy, Infra, and Pharma.

According to Motilal Oswal Securities, India's GDP is set to surpass $4 trillion by FY25/26 and $8 trillion by FY34. Anticipating political stability post Lok Sabha Elections 2024, the economy gears up for increased focus on infrastructure, capex, and manufacturing. With robust growth potential, India's capital markets are primed for prosperity in the coming years.

"India is enjoying a mini-Goldilocks moment with solid macroeconomics, healthy earnings, stable interest rates, moderate inflation, and consistent policy momentum. We're confident in India's medium-term potential, focusing on domestic cyclicals like financialization, private investment, consumption, real estate, and infrastructure development. Expect intermittent volatility from events like General Elections’24 and global macro shifts. Our model portfolio reflects our faith in domestic themes," Motilal Oswal Securities said in its latest note.

In the last few trading sessions markets showed signs of breaking resistance, yet institutional flows don't support the rise. In the last three sessions, FII sold around Rs 2500 crore, while in the last two sessions, domestic institutional investors sold around Rs 4000 crore.

Indian markets hit new record highs on April 4 but remained flat on April 5. Analysts said the resumption of flows could lead to higher levels, but a correction and consolidation phase is imminent. Q4 earnings will be crucial for valuations, needing strong support to avoid market correction, especially for individual stocks if earnings fall short of valuations.

On April 5, the Reserve Bank of India maintained the repo rate, in line with analysts' expectations. But it also suggested a cautious approach toward inflation reduction. Analysts point out declining core price pressures and weak gross value-added growth, advocating for rate cuts to spur growth. They anticipate an easing cycle to start in August, but prolonged high rates pose a risk to economic growth potential. The monetary policy committee voted 5-1 to keep the repo rate steady, with member Jayanth Varma advocating for a 25-bp rate cut for the second consecutive meeting.

Last week, the US stock market closed positively as a strong jobs report indicated continued economic strength, potentially leading to sustained interest rates. All major groups in the S&P 500 gained over 1%, with optimism that a robust economy would delay Fed policy easing. This sparked a rise in Treasury yields and reduced projections for Fed rate cuts in 2024. With March payrolls exceeding expectations, unemployment dropped to 3.8%, wages increased, and workforce participation grew, highlighting a strong labor market.