In the financial year 2006 the Indian stock markets have crossed the 13,000 mark. This is the first time in the history of stock markets in India that stock markets could have reached such a height. This recent boom in stock markets is attributed to the surge in IT, ITES, banking and real estate sectors in India. Another interesting point is that, this year for the first time, the market capitalization of the Bombay Stock exchange (BSE) has been more than the country’s domestic GDP. The total enrolled market capital exceeded Rs. 34 lakh crores, being almost Rs. 2 lakh crores more than the corresponding GDP figure of 32 lakh crores (approx) in the 2006 financial year.

India is the first country in the BRIC (Brazil, Russia, India, China) alliance where the market capitalization of all the listed companies in stock exchange has been more than the country’s GDP. With this India has managed to enter the clique of the developed nations, including the US and the UK, along with few other emerging nations like South Africa, Malaysia and Singapore.

The excellent quarterly turnover, especially by the companies operating in the IT industry like Infosys and Wipro has contributed significantly in changing the Indian stock market scenario in recent time.

Among the other factors, huge inflow of foreign funds and the entry of retail investors in the stock markets have played a major role in fuelling the recent surge of Indian stock markets. Increasing domestic consumption backed by substantial economic growth also propelled the Sensex to reach the 13,000 mark. The contributions of foreign institutional investors and mutual funds have also been significant enough in maintaining the buoyancy of our stock market. Growing interests among the domestic households to invest money in stock markets acted as a stimulant to accelerate the growth process of stock markets in India.