What-Is-Sensex-and-Its-Importance-in-the-Indian-Stock-Market
December 17, 2009
Sensex is basically an indicator of the health of the stock markets in India. It is the most popular stock market index in India. It is just a number and the value of Sensex is closely followed by a number of investors, promoters, market experts, brokers and several other stakeholders not only in India but across the world. One can know the relative strength or weakness of the Indian stock market by the movement of Sensex on the Bombay Stock Exchange, popularly known as BSE. Sensex is an acronym for ‘Sensitive Index’ of the BSE, the country’s wellknown stock exchange with its existence dating back to 1875. With a history of 134 years, it is Asia’s oldest stock exchange. It started as “The Native Share and Stock Brokers’ Association.” It is situated at Dalal Street in the Fort area of Bombay. Sensex is an index of equity shares of India’s top 30 companies representing 12 major sectors in India. It was first launched on January 1, 1986. The Sensex started with a base value of 100 in 1978-79. The Sensex is closed at 16,913 points on December 16, 2009; which means the value of Sensex has gone up by about 170 times (16,913 divided by the base value 100) in the last 30 years or so. One year back, the Sensex was at 9,715 points – which means the value of Sensex has gone up by 1.74 times in the last one year. The composition of Sensex changes dynamically – existing companies are excluded and new companies are added on a regular basis. However, the total number of companies in the Sensex is always kept at thirty. For example, Ranbaxy Laboratories was excluded from Sensex on June 29, 2009 and simultaneously Hero Honda Motors Limited was included on the same date in the Sensex. Other latest inclusions are stocks of Sun Pharma, Sterlite Industries, Tata Power and Jaiprakash Associates; while simultaneously excluding Satyam Computers, Ambuja Cements, Cipla and Bajaj Auto respectively. Moreover, a company may be excluded on a particular date but the same
Sensex is basically an indicator of the health of the stock markets in India. It is the most popular stock market index in India. It is just a number and the value of Sensex is closely followed by a number of investors, promoters, market experts, brokers and several other stakeholders not only in India but across the world. One can know the relative strength or weakness of the Indian stock market by the movement of Sensex on the Bombay Stock Exchange, popularly known as BSE. Sensex is an acronym for ‘Sensitive Index’ of the BSE, the country’s wellknown stock exchange with its existence dating back to 1875. With a history of 134 years, it is Asia’s oldest stock exchange. It started as “The Native Share and Stock Brokers’ Association.” It is situated at Dalal Street in the Fort area of Bombay. Sensex is an index of equity shares of India’s top 30 companies representing 12 major sectors in India. It was first launched on January 1, 1986. The Sensex started with a base value of 100 in 1978-79. The Sensex is closed at 16,913 points on December 16, 2009; which means the value of Sensex has gone up by about 170 times (16,913 divided by the base value 100) in the last 30 years or so. One year back, the Sensex was at 9,715 points – which means the value of Sensex has gone up by 1.74 times in the last one year. The composition of Sensex changes dynamically – existing companies are excluded and new companies are added on a regular basis. However, the total number of companies in the Sensex is always kept at thirty. For example, Ranbaxy Laboratories was excluded from Sensex on June 29, 2009 and simultaneously Hero Honda Motors Limited was included on the same date in the Sensex. Other latest inclusions are stocks of Sun Pharma, Sterlite Industries, Tata Power and Jaiprakash Associates; while simultaneously excluding Satyam Computers, Ambuja Cements, Cipla and Bajaj Auto respectively. Moreover, a company may be excluded on a particular date but the same