New Delhi:
The Indian stock market faces a high risk of losing its trillion-dollar tag, even as a timely intervention by the Reserve Bank helped it hold onto this mark by a whisker last week.
The market size, measured in terms of total valuation of all listed shares, is just hovering over the trillion-dollar mark (Rs 54,11,301 crore or US $1.026 trillion based on current currency rate of Rs 52.30 per US dollar), but could slip out of this coveted league anytime in the event of any noticeable fall in the rupee value or share prices.
Besides India, there are an estimated 13 countries in the trillion-dollar stock market club. These include the US, the UK, Canada, Brazil, Australia, Hong Kong, South Korea, China, Japan, Spain, Germany, Switzerland and France.
Earlier this year, Russia moved out of this league, while the valuation of a pan-regional stock market for the Nordic region in Europe has also slipped below US $1 trillion.
The size of Indian market might also slip below US $1 trillion in either of the two possibilities - the rupee value again slips back to Rs 54-level against the US dollar, or the Sensex nosedives by an estimated 350-400 points.
During last trading session on December 16, the Reserve Bank of India's (RBI) policy action may have failed in containing the Sensex slide to a two-year low, but its intervention in the rupee movement helped the market retain its trillion-dollar tag for the time being.
The market went into a tailspin on Friday, as the Central bank's decision to keep the interest rates unchanged did not help the sagging investor sentiments, and the barometer Sensex declined to its lowest level since November 3, 2009.
In the process, the value of Indian stock market, measured in terms of the collective value of all listed
shares, fell to Rs 54,11,301.50 crore (US $1.026 trillion).
The Indian market would have lost its trillion-dollar valuation, if the rupee had managed to at least hold onto the record sub-54 level, it hit on Thursday.
Rupee plunged to a record low of Rs 54.30 against the US dollar on December 15, but an RBI intervention reversed the fall and the Indian currency came back to near Rs 52-level.
At the rupee's record low level, Indian stock market's size would have been as low as US $996.5 billion at the end of Friday's trade.
However, as the rupee returned to near 52-level and closed at Rs 52.70 against the US dollar on Friday, the market valuation managed to hold onto the USD one trillion mark.
There were no high expectations for any rate cut decision from the RBI's policy meeting today, but the prevailing high-rate regime has significantly hurt the corporate sentiments due to high borrowing costs.
The Indian market had first achieved a trillion-dollar size about four and half years ago on May 28, 2007, but moved out of this coveted league about a year later on July 1, 2008.
India again joined this elite club of markets with trillion-dollar valuation about a year later on June 3, 2009.
The Indian market was, in fact, seen inching towards the two-trillion dollar mark at least twice in the past - first in early 2008 and then at the beginning of 2011 with a size as high as US $1.9 trillion.
However, a sharp plunge in the market this year has led to its valuation falling by close to Rs 20 lakh crore (over US $500 billion) and currently faces a high risk of losing its trillion-dollar tag.