India Joins $5 Trillion Club Once Again as Equities Rally Across Market Segments
India’s equity markets have reclaimed a significant milestone with the total market capitalisation (m-cap) of all BSE-listed companies crossing $5 trillion, marking a recovery after nearly three months. The last time the market surpassed this threshold was on January 20. Following a sharp correction earlier this month that saw m-cap fall to $4.5 trillion by April 7, the markets have rebounded with over $500 billion in recovery, largely propelled by broad-based buying interest and easing global tensions.
India is now once again part of an elite group of economies with market capitalisation exceeding $5 trillion, joining the ranks of the United States, China, Japan, and Hong Kong. This turnaround places Indian equities back on the radar of global investors, amid improving trade sentiment and favourable macroeconomic conditions.
Highlights:
BSE-listed companies’ market capitalisation crosses $5 trillion on sustained rally
India rejoins global $5 trillion m-cap club with US, China, Japan, and Hong Kong
Markets recovered over $500 billion since bottoming on April 7
Broader Market Participation Fuels Recovery Amid Improving Risk Appetite
The rally has not been confined to large-cap indices alone. While the Sensex and Nifty have each gained nearly 9% since April 7, the BSE MidCap and SmallCap indices have posted stronger rebounds of 9.4% and 10.6% respectively. Nifty Bank and BSE PSU indices have also surged 11% and 10% respectively, underscoring broad investor confidence.
This uptick in sentiment has been attributed to multiple macro and micro triggers, including an improvement in risk-on appetite, progress in trade negotiations with the United States, and the recent suspension of reciprocal tariffs by Washington. The uptrend was further reinforced by a decline in crude oil prices, which has helped ease inflationary pressure and improve India’s trade balance position.
Highlights:
Sensex and Nifty up 9% since April 7
BSE MidCap and SmallCap indices gained 9.4% and 10.6% respectively
Nifty Bank rose 11%, BSE PSU Index up 10% in the same period
Falling crude oil supports disinflation and trade stability
Foreign Inflows and Earnings Optimism Provide Tailwinds to Valuation Upside
According to NSDL data, foreign portfolio investors (FPIs) have pumped in over $1 billion in net inflows over the past two sessions, reflecting a renewed interest in Indian equities. This resurgence of foreign capital marks a notable shift after months of persistent selling, and analysts point to a favourable global currency environment—driven by a weakening dollar and rupee stability—as aiding FPI allocation to India.
Moreover, early projections for the June quarter earnings suggest 2–3% growth, providing fundamental support to valuations. Brokerages, including IIFL Securities, believe the current rally could extend further, projecting a 5–10% upside from current levels. IIFL noted that smallcap valuations are becoming increasingly attractive following significant de-rating and downgrades over the past quarters.
Highlights:
Over $1 billion in FPI inflows in the last two sessions
Early earnings estimates project 2–3% growth for Q1 FY26
IIFL sees 5–10% potential upside from current market levels
Smallcaps now present compelling valuation opportunity
Technical Setup Indicates Room for Further Gains; Sector Rotation Favours Domestic Themes
Technical analysts are interpreting the recent price action as consolidation with bullish bias. The Nifty is said to be forming a base between 21,900 and 23,800, setting the stage for a potential breakout towards the 25,500 mark over the next two quarters, assuming supportive macro and earnings trends.
Experts also note that much of the negative global newsflow, including recession fears and trade policy uncertainty, may already be priced into the market. As a result, sector rotation is gaining traction, with analysts recommending a shift toward domestic-focused sectors. Financials are expected to maintain leadership, while PSU stocks, metals, telecom, pharma, and consumer-facing sectors are seen as favourable bets. On the other hand, capital goods, infrastructure, and selective IT counters are also emerging as attractive due to risk-reward setups.
Highlights:
Nifty consolidating between 21,900–23,800; target seen at 25,500 in 2 quarters
Sector rotation favours domestic-driven sectors over global cyclicals
Financials, PSU, metal, telecom, pharma, and consumption in focus
IT and infrastructure seen offering risk-adjusted entry points
Global Developments and Trade Talks Remain Key Watchpoints
Amid the optimism, investors are keeping a close watch on geopolitical and economic developments, especially with US Vice President JD Vance currently visiting India. Scheduled to meet Prime Minister Narendra Modi, the visit is expected to focus on advancing trade discussions, which could further impact bilateral investment flows and economic cooperation.
While the current sentiment remains buoyant, analysts have cautioned that global uncertainties, including monetary policy shifts, inflation trends, and geopolitical tensions, could introduce volatility. Market participants are advised to remain selective and focus on fundamental strength while tracking quarterly earnings and policy cues.
Highlights:
US Vice President JD Vance in India; key trade talks on agenda
Investors advised to remain cautious amid global uncertainties
Market trajectory to depend on earnings season and global policy signals
