The stock markets attained further depth and width during 2007, says the Economic Survey 2007-08. The benchmark 30-stock BSE Sensex scaled a high of 20,000-mark at the close of calendar year 2007 and NSE Index rose to close about 6100-mark.

Both the indices more than tripled between 2003-07.

The total amount of the capital raised through different instruments in the primary market was 31.5 per cent higher in 2007 compared to 2006. Component wise:

• Private placement at Rs1,11,838 crore up to November 2007 accounted for the major share during 2007 
  
• The total equity issues mobilized Rs58,722 crore, of which Rs33,912 crore was accounted for by initial public offerings 
  
• During 2007, the total number of IPOs issued was 100 as compared to 75 in the previous year
  
• Net flow of savings into mutual funds increased by over 30 per cent in 2007 to Rs138,270 crore. Of this 1,20,766 crore was in Private Sector, 8,259 in the public sector and Rs.9245 crore in UTI funds

During 2007-08 the secondary market rose on a point-to-point basis with the Sensex and Nifty rising by 47.1 and 54.8 per cent respectively. Amongst NSE indices, both Nifty and Nifty Junior delivered record annual equity returns of 54.8 per cent and 75.7 per cent respectively during the calendar year. BSE Sensex yielded a compounded return of 36.5 per cent between 2003 and 2007. Sensex has given an annual return of over 40 per cent during the last three years.

Market capitalisation in India nearly doubled in 2007: 

• The BSE 500 capitalised to Rs64,70,881 crore up from Rs33,36,509 crore in 2006 
  
• BSE Sensex capitalised to Rs28,61,341 up from Rs.17,58,65 crore in 2006 
  
• Nifty to Rs35,22,527 crore from Rs19,75,603 crore and 
  
• Nifty Junior to Rs6,43,623 crore, from  Rs.3,33,693 crore. 
  
• The price to earnings (P/E) ratio was higher at around 27 by end December, 2007 as compared to 21 in the previous year

The valuation of Indian stocks as reflected in P/E multiples at the end of December 2007 was the highest amongst the select emerging market economies such as 

• South Korea 15.04 
  
• Thailand 19.92 
  
• Malaysia 16.07 
  
• Indonesia 18.43 
  
• Taiwan 20.14. 
  
• India 27

In India, market capitalisation (BSE 500) at $1,638 billion was 150 per cent of GDP, which compares well with the other economies such as 

• China 137.3 per cent 
  
• Japan 104.4 per cent 
  
• South Koria 116.2 per cent and 
  
• USA 128.8 per cent.

In the derivative market the NSE and BSE turnover added up to Rs1,21,60,701 crore during 2007 showing a quantum growth over the previous years.

The Economic Survey highlights some policy and regulatory changes for the capital markets introduced during the year including 

• Amendments to Disclosure and Investor Protection Guidelines; 
  
• Appointment of a sub- committee on Disclosures and Accounting for integrating initial and continuous disclosures of companies; 
  
• Stipulation that Permanent Account No would be the sole identification number for all participants in the security markets; 
  
• Successful completion of demutualisation process by 16 stock exchanges; 
  
• SEBI permitting short selling by institutional investors and 
  
• Waiver of entry load by mutual funds for investors making applications for investment in mutual fund schemes directly