What is Sensex?
Sensex is the abbreviation for the Bombay Stock Exchange Sensitive Index, a stock market index of 30 companies listed on the Bombay Stock Exchange. This index is one of the most important indices in India and it represents around 75% of the total capitalization on the Indian stock market.
Sensex was first introduced in 1985 and was calculated as a weighted average of 30 stocks. It was created to measure the performance of stocks traded at BSE. It has been updated periodically to include more companies and now comprises more than 800 companies listed on BSE. Take a look For additional information Join our Channel for Trending Trending & Trending. To understand the Sensex index in greater detail, one must know what it is and how it is calculated. The Sensex index is a stock market index calculated by collecting the prices of thirty large and influential companies on the National Stock Exchange or NSE, representing about three-quarters of all stocks traded on that exchange.
It can be used to measure the boom and bust periods of the Indian economic cycle. The Sensex growth is often compared to other economic indicators such as Gross Domestic Product (GDP), inflation rate, and foreign exchange reserves.
How Can You Use Sensex Data in Your Investment Strategy
The Sensex is the index of 30 major companies that are traded on the Bombay Stock Exchange. It includes blue-chip, large-, and mid-cap stocks from different sectors of the economy and is a good representation of India’s equity market. The Sensex is a good indicator to assess the state of the Indian economy. Investors can use Sensex data for their investment strategy by using it for analysis, using it as an indication for its own portfolio, or designing an alternative strategy by looking at how other markets perform.
Sensex data should not be used in isolation to make decisions on investing. But it can be used as an indicator to put together an investment strategy that fits your risk profile and requirements.
An investment strategy is a long-term process that starts with analyzing the market and ends with making an informed decision. Sensex data is one of the key factors to analyze before making an investment decision. Sensex data can be used to make informed investment decisions in various ways. One way is by using it to make sense of the market and its trend. The second way is by looking at it patterns that may help predict future trends or events.
Sensex as a Benchmark Index to Track Indian Economy
The Sensex is a popular benchmark index that tracks the Indian economy. It is a free-float market-capitalization-weighted index, which provides a snapshot of the state of the Indian economy and is often regarded as an indicator of investor sentiment. The Sensex was started by an equity research company called “S&P India” in 1984. S&P started this index to measure the performance of 30 large and actively traded companies on the Bombay stock exchange with their headquarters in India who were classified as "industrial stocks". The Sensex was originally made up of 30 stocks but now contains only 14 stocks. The MSCI India Index, which has similar goals as Sensex except it takes into account other sectors like financials and services, was created in 2007.
Formula to calculate Sensex
The base period (year) for Sensex calculation is 1978-79. The base value index is 100. Using the above formula, one can calculate the value of BSE Sensex.
Value of Sensex = (Total free-float market capitalization/ Base market capitalization) Base period index value.
Constituents of Sensex 30 Companies by Weightage
|1||Reliance Ind||Integrated Oil & Gas||13.36%|
|4||Infosys||IT Consulting & Software||8.70%|
|6||TCS||IT Consulting & Software||5.13%|
|7||Kotak Mahindra Bank||Banks||4.23%|
|9||Hindustan UNI||Housing Finance||3.18%|
|10||Larsen & Toubro||Construction & Engineering||3.37%|
|11||State Bank of India||Banks||3.11%|
|13||Bajaj Finance||Holding Companies||2.63%|
|14||Bharti Airtel||Telecom Services||2.62%|
|16||Maruti Suzuki||Cars & Utility Vehicles||1.85%|
|17||Mahindra & Mahindra||Cars & Utility Vehicles||1.78%|
|18||HCL Technologies||IT Consulting & Software||1.54%|
|19||Titan Co||Titan Co||1.53%|
|21||Bajaj Finserv||Finance (including NBFCs)||1.22%|
|22||Tata Steel||Iron & Steel/Interm.Products||1.19%|
|23||UltraTech Cement||Cement & Cement Products||1.18%|
|24||Power Grid||Electric Utilities||1.12%|
|27||Tech Mahindra||IT Consulting & Software||1.03%|
|28||Wipro||IT Consulting & Software||0.96%|
|30||Dr. Reddy’s Labs||Pharmaceuticals||0.84%|