BSE SENSEX

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BSE SENSEX

The BSE SENSEX, also known as the S&P BSE SENSEX, is a stock market index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE) in Mumbai, India. The term "SENSEX" is a portmanteau of the words "Sensitive" and "Index". It is one of the oldest stock market indices in India, having been introduced in 1986.

History

The BSE SENSEX was first compiled in 1986, and it is considered a benchmark index for the Indian stock market. The base year of the SENSEX is 1978-79, and the base value is 100. The index is calculated based on a free-float market capitalization methodology, which was adopted in 2003.

Calculation Methodology

The SENSEX is calculated using the free-float market capitalization method. This method takes into account the proportion of shares readily available for trading in the market. The formula for calculating the SENSEX is:

SENSEX = (Sum of Free-float Market Capitalization of 30 companies) / (Base Market Capitalization) * Base Index Value (100)

Constituent Companies

The SENSEX comprises 30 companies from various sectors, representing a sample of large, liquid, and representative companies. These companies are selected by the Index Committee of the BSE, which includes academicians, mutual fund managers, and other market participants.

Significance

The SENSEX is widely regarded as a barometer of the Indian economy. It reflects the overall market sentiment and the performance of the major companies listed on the BSE. Investors, analysts, and policymakers closely monitor the SENSEX to gauge the health of the Indian stock market and the economy.

Milestones

The SENSEX has achieved several significant milestones since its inception. Some of the notable milestones include:

• Crossing the 1,000 mark in July 1990
• Reaching the 10,000 mark in February 2006
• Surpassing the 20,000 mark in October 2007
• Crossing the 50,000 mark in February 2021

Related Indices

The BSE SENSEX is part of a family of indices that includes:

• BSE 100
• BSE 200
• BSE 500
• BSE Midcap
• BSE Smallcap

See Also

• Bombay Stock Exchange
• NIFTY 50
• Stock market index
• Free-float market capitalization
• Indian economy