Sensex Full Form; which stands for ‘Stock Exchange Sensitive Index‘, is the stock market index for the Bombay Stock Exchange. It calculates the movement on BSE.
The full form of Sensex is Stock Exchange Sensitive Index. The Sensex, also known as BSE (Bombay Stock Exchange Sensitive Index), is the first and one of the largest securities markets in India. BSE Sensex is a free-float, market-weighted stock market index of the 30 biggest financially sound Indian companies listed on BSE.
The term Sensex refers to the benchmark index of the BSE in India. The Sensex comprises 30 of the largest and most actively traded stocks on the BSE and provides a gauge of India’s economy. It is float-adjust and market-capitalization-weighted. The Sensex is reviewed semiannually each year in June and December. Created in 1986, the Sensex is the oldest stock index in India and is operated by Standard & Poor’s (S&P). Analysts and investors use it to observe the cycles of India’s economy and the development and decline of particular industries.
सेंसेक्स शब्द भारत में बीएसई के बेंचमार्क इंडेक्स को संदर्भित करता है। सेंसेक्स बीएसई पर 30 सबसे बड़े और सबसे सक्रिय रूप से कारोबार वाले शेयरों में शामिल है और भारत की अर्थव्यवस्था का एक गेज प्रदान करता है। यह फ्लोट-एडजस्टेड और मार्केट-कैपिटलाइज़ेशन-वेटेड है। सेंसेक्स की हर साल जून और दिसंबर में अर्धवार्षिक समीक्षा की जाती है। 1986 में बनाया गया, सेंसेक्स भारत का सबसे पुराना स्टॉक इंडेक्स है और इसे स्टैंडर्ड एंड पूअर्स (S&P) द्वारा संचालित किया जाता है। विश्लेषक और निवेशक इसका उपयोग भारत की अर्थव्यवस्था के चक्र और विशेष उद्योगों के विकास और गिरावट का निरीक्षण करने के लिए करते हैं।
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Understanding the Sensex
The Sensex is launching on Jan. 1, 1986. It is both a bellwether and an investable index used to track the performance of India’s 30 largest and most financially sound companies. These companies are listed on the BSE (previously known as the Bombay Stock Exchange) and represent some of the biggest and most important sectors of the Indian economy. As such, it is India’s most-tracked index.
History of the Sensex
The BSE Sensex’s plunged 12.7%—its worst-ever fall—on April 18, 1992, after revelations of a scam in which a prominent broker siphoned money from the public banking sector to pump money into the stock.
The index experienced enormous growth since India opened up its economy in 1991. The biggest gains occurred in the 21st century when it rose from around 5,000 in early 2000 to more than 42,000 in January 2020. This has mainly been the result of India’s surging economy, which for years has grown at one of the fastest paces in the world.
India’s expanding economy owes much to the rise of the nation’s middle class and vice versa. According to one study, nearly 80% of the nation’s households will be middle-income by 2030, up from about 50% in 2019. The middle class is an important driver of consumer demand.
However, India’s economic growth has slowed in recent years, reaching the lowest level in a decade in 2019. The outbreak of the global coronavirus pandemic in early 2020 has slowed the economy further, casting a shadow over future gains.
Benefits of Sensex
Sensex depicts the conditions of the market succinctly to help investors discover patterns in the market. Key benefits of Sensex include:
- Helps investors to pick the right stocks
- Offers clearer visibility of a company’s reputation
- The convenient metric for beginners
- Reflects sentiments of investors
- Helps companies to raise their share capital
- Offers growth opportunities like expansions, mergers, and acquisitions.
How Does the Sensex Work?
The Sensex is numerate using a free-float capitalization method. This method is similar to the market-capitalization weighting method, in which companies are weighted according to their share of the total market capitalization of the index. As such, Sensex gives more weight to the largest companies within its index. But unlike the market-capitalization method, the free-float capitalization method only takes into account shares that are freely available to be trad, as opposed to restricting shares or those held by companies’ insiders.
How is Sensex calculate?
S&P BSE SENSEX is numerate using the “Free-float Market Capitalization” methodology. As per this methodology, the level of index at any point of time reflects the Free-float market value of 30 component stocks relative to a base period.
What are Sensex and Nifty?
What are Nifty and Sensex in simple words?
Nifty and Sensex are benchmark index values for measuring the overall performance of the stock market. Nifty is the index used by the National Stock exchange, and Sensex is the index used by the Bombay Stock Exchange.
How are Sensex 30 companies selecte?
Companies chosen to be on the Sensex are based on several criteria including whether the company is large or mega-cap, is liquid and has a healthy balance sheet, solid revenue margins, is enlisted in the BSE, and with a large market share in the industry that they operate in.
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List of BSE Sensex Companies
The base year of the Sensex was taken as 1978-79 with the base value of 100. The Sensex Index has been modified many times since its inception. The 30 constituent companies include some of the largest and most actively traded stocks, which represent various industrial sectors of the Indian economy.
- Sun Pharmaceutical Industries Ltd.
- Hindustan Unilever Ltd.
- Titan Company Ltd.
- HCL Technologies Ltd.
- Tech Mahindra Ltd.
- Oil & Natural Gas Corporation Ltd.
- Bharti Airtel Ltd.
- Kotak Mahindra Bank Ltd.
- Tata Consultancy Services Ltd.
- Power Grid Corporation of India Ltd.
- Bajaj Auto Ltd.
- ITC Ltd.
- Housing Development Finance Corporation Ltd.
- Nestle India Ltd.
- Infosys Ltd.
- Maruti Suzuki India Ltd.
- Bajaj Finserv Ltd.
- State Bank of India
- HDFC Bank Ltd.
- Mahindra & Mahindra Ltd.
- Reliance Industries Ltd.
- Larsen & Toubro Ltd.
- Asian Paints Ltd.
- IndusInd Bank Ltd.
- Axis Bank Ltd.
- ICICI Bank Ltd.
- NTPC Ltd.
- Ultratech Cement Ltd.
- Tata Steel Ltd.
- Bajaj Finance Ltd.