Its common knowledge that the Sensex has risen. Or perhaps the market has plummeted in our daily lives, prompting investors to be fearful about the market’s future.
Market and Sensex imply what exactly? For what purpose are the scores assigned? In this story, I have explained what Sensex is and how it functions. Its rise and fall are a mystery. Why and how the Sensex is computed.
Definition and Some Facts
Sensex comes from two different words, namely “Sensitive Index”, coined by stock market analyst Deepak Mohoni.
The Sensex is an index that reflects the Bombay Stock Exchange (BSE). It is used to track the performance of India’s 30 largest and most financially sound companies.
These companies are listed on the Bombay Stock Exchange (BSE) and are among the country’s largest and most influential economic players. Sensex is India’s most closely watched index.
INR and USD are used to compute the Sensex. Currently, the entire market capitalization of the index is 3.71 trillion rupees as of August 31, 2021.
It is also called S&P Sensex, as it is operated by Standard & Poor (S&P).
Other Facts about Sensex
- Launched on: Jan 1, 1986.
- Strength: 30 Listed and most reputed and High M-Cap Companies.
- Worst ever fall = April 18, 1992 (Harshad Mehta Scam) (12.7%)
- Companies that make up the Sensex are drawn from the Bombay Stock Exchange, which is the largest in India and one of the largest stock exchanges in the world.
- Sensex is calculated using a free-float capitalization method.
Why is Sensex Important?
Indicators of the BSE’s stocks, such as the SENSEX, show whether the stocks are going up or down in value over time.
No, the SENSEX does not stand for anything other than the BSE-Sensitive Index, which is a “Market Capitalization-Weighted” index of 30 stocks reflecting a sample of big, established, and financially solid firms.
There are a lot of ways to assess the success of the Indian stock markets, and this index, which reflects The Bombay Stock Exchange’s underlying universe of listed firms, is a popular way to do it.
