India’s Market Cap Soars by $1 Trillion: in top 10 equity markets

India's equity markets have seen a $1 trillion surge in market capitalization since March 2025, reaching $5.33 trillion. This 21% growth is the highest among the world’s top 10 equity markets, securing India’s spot as the fifth-largest globally. Benchmark indices Sensex and Nifty rose 12.5% and 13.5%, with broader indices outperforming. However, stretched valuations have raised concerns, and earnings projections for FY26 and FY27 have been downgraded. Despite cautious forecasts, India’s markets showcase resilience and potential for long-term growth.

India's equity markets have experienced a remarkable surge, with listed companies adding an impressive $1 trillion to their market capitalization since March 2025. This significant growth has pushed the nation’s total market capitalization to a staggering $5.33 trillion, cementing its position as the fifth-largest equity market globally. This rally follows a challenging five-month correction that spanned from October 2024 to February 2025, according to a report by Moneycontrol.

A Global Leader in Market Growth

In percentage terms, India’s market capitalization has skyrocketed by over 21%, the highest growth rate among the world’s top 10 equity markets. This places India just behind the United States, China, Japan, and Hong Kong in the global equity rankings.

Germany emerged as the second-best performer during this period, recording a 14% rise in market capitalization. Canada followed with an 11% increase, while Hong Kong saw a 9% gain. Other major markets, such as Japan and the United Kingdom, posted more modest growth of roughly 8% each.

Interestingly, the world’s largest equity market, the United States, recorded a subdued 2.4% increase in market capitalization. China, the second-largest market, fared slightly better with a 2.7% gain. In contrast, France and Taiwan reported gains of 3.9% and 3.2%, respectively.

Sensex and Nifty Lead the Charge

India’s rally was driven by robust performances from its benchmark indices. The Sensex climbed 12.5%, while the Nifty surged by 13.5% during this period. The broader market indices outperformed even these benchmarks, with the BSE MidCap index rising 20.7% and the SmallCap index delivering an impressive 26% gain.

This strong market performance has, however, raised some concerns. Analysts have noted stretched valuations across various sectors, which could pose challenges for sustaining the current momentum. This has led to a cautious approach in earnings projections.

Cautious Optimism in Earnings Forecasts

Earnings estimates for Indian companies reflect a mix of optimism and caution. According to JM Financial, the Nifty 50’s earnings per share (EPS) estimate for FY25 received a slight upward revision of 0.3% in April 2025. However, projections for FY26 and FY27 were revised downward by 1.1% and 1.0%, respectively.

The minor upgrade for FY25 EPS can be attributed to low analyst expectations for Nifty’s fourth-quarter FY25 profit after tax (PAT) ahead of the results season. The downward revisions for FY26 and FY27, however, highlight a more cautious outlook. Notably, the April 2025 cuts were sharper compared to those in February and March, which stood at 0.9%/0.6% and 0.2%/0.6%, respectively.

Bloomberg consensus estimates project a 14% year-on-year earnings growth for Nifty 50 companies in FY26, showcasing potential for future expansion, albeit tempered by current caution.

The recent rally in India’s equity markets underscores the resilience and growth potential of the country’s economy. However, the stretched valuations and cautious earnings outlook indicate the need for careful navigation in the coming months. As India solidifies its position as a global equity market leader, investors will be closely watching for signals of sustained growth and stability.