Sensex is the prime index of Bombay Stock Exchange containing thirty (30) large stocks from various sectors to calculate the value of index from listed companies.
Sensex ( Sensitive Index ) is the prime index ox Bombay Stock Exchange. Top 50 large companies Free Float Market Capital reflects in Sensex. BSE is the First stock exchange in Asia located in Bombay. Many world countries follows the sensex points as one of the popular benchmark index.
| Sensex Data | Definition - Explanation |
|---|---|
| Name of the Exchange | Bombay Stock Exchange |
| Base Year | 1978-79 |
| Base Index Value | 100 |
| Date of Launch | 01-01-1986 |
| Method of calculation | Introduced on full market capitalization method and calculation method shifted to free-float market capitalization with effect from September 01, 2003. |
| Number of scrips | 30 |
| Index calculation frequency | Real Time, During trading hours. |
| Index calculation and Maintenance | The BSE Index Cell does the regular maintenance of the index within the broad index policy framework set by the BSE Index Committee. |
Bse Sensitive Index Story
"SENSEX" first started in 1986, "Bse Sensex" is the leading stock exchange index in India. Sensitive index follows “free-float” market capitalization weighted index of thirty stocks covering the Leading industry sectors in India. There are numerous Exchange Traded Funds and mutual funds benchmarking the SENSEX that are traded in India and overseas particularly in Asia. In addition, the Bombay Stock Exchange trades Futures and Options (F and O) on the SENSEX.
Bse Sensex Calculation Methodology
Sensex Calculation : BSE SENSEX is computed using the Free-float Market Capitalization methodology. The level of index value at any point of time reflects the free-float market value of 30 index stocks relative to a base period. The market capitalization of a company is determined by multiplying the current market price of its stock by the total number of shares issued by the company. The base period of SENSEX ( Sensitive index ) is 1978-79. The base value of SENSEX is 100 index points. This is often indicated by the notation 1978-79=100. During market hours, real time prices of the index scrips used by the trading system to calculate SENSEX on a continuous basis.
Free-float Methodology
Free-float market capitalization takes into consideration only those shares issued by the company that are readily available for trading in the share market. It excludes promoters' holding, strategic holding, government holding and any other locked-in shares that will not come to the market for trading in the normal condition. In other words, the market capitalization of each company in a free-float index is reduced to its readily available shares in the market from total market capital.
Advantages of Free-float Method
A Free-float index reflects the market trends more rational and transparent. It takes into consideration only those shares that are available for trading. Free-float Methodology improves index flexibility in terms of including or excluding any stock from the lot of listed stocks. Widely accepted method to calculate indices.
Real time computation of SENSEX
During trading hours, value of the Index is calculated sensitively and disseminated on real time basis. This is done automatically on the basis of on-line prices at which trades in Index constituents are executed.
Sensex Closing Value
The closing SENSEX on any trading day is computed taking the weighted average of all the trades on SENSEX constituents in the last 30 minutes of trading session. If a SENSEX has not traded in the last 30 minutes, the last traded price is taken for computation of the Index closure. The use of Index Closure Algorithm prevents any sudden volatile of the closing index value.
SENSEX scrip selection criteria
1. Equities of companies listed on Bombay Stock Exchange Ltd, shall be considered eligible (except Z group, mutual funds, scrips suspended, scrips objected by the Surveillance department of the Exchange).
2. The scrip should have a listing history of at least three months at BSE. An exception may be granted if need.
3. The scrip should have been traded on each and every trading day in the last three months at BSE.
4. Stocks that have reported revenue in the latest four quarters from its core activity are eligible.
5. From steps 1-4, the top 75 companies based on free-float market capitalisation (average 3 months) are selected as well as any additional companies that are in the top 75 based on full market capitalization (average 3 months).
6. The filtered list of constituents selected through Step 5 (which can be greater than 75 companies) is then ranked on absolute turnover (average 3 months).
7. Any company in the filtered, sorted list created in Step 6 that has Cumulative Turnover of above 98%, are excluded, so long as the remaining list has more than thirty scrips.
8. The filtered list calculated in Step 7 is then sorted by free float market capitalization. Any company having a weight within this filtered constituent list of below 0.50% shall be excluded.
9. All remaining scrips will be sorted on sector and sub-sorted in the descending order of rank on free-float market capitalization wise.
10. Industry / Sector representation, scrip selection will generally attempt to maintain index sectoral weights that are broadly in-line with the overall market.
In the opinion of the BSE Index Committee, should have an acceptable track record.
| SENSEX Milestones (Points) | History Explanation |
|---|---|
| 1000, 25-July-1990 | The Sensex hit the four-digit figure for the first time and closed at 1,001 in the wake of a good monsoon and excellent corporate results. |
| 2000, 15-January-1992 | BSE index crossed the 2,000-mark and closed at 2,020 followed by the liberal economic policy initiatives undertaken by the finance ministry. |
| 3000, 29-February-1992 | The Sensex surged past the 3000 mark in the wake of the market-friendly Budget announced by Government of India. |
| 4000, 30-March-1992 | Expectations of a liberal export-import policy, Then Harshad Mehta scam hit the markets and Sensex witnessed unabated selling. |
| 5000, 11-October-1999 | Sensex crossed the 5,000-historical level as the Bharatiya Janata Party won the 13th Lok Sabha election with majority. |
| 6000, 11-February-2000 | The information technology boom helped the Sensex to cross the 6,000-level. |
| 7000, 21-June-2005 | The news of the settlement between Reliance brothers boosted investor sentiments of the scrips. |
| 8000, 08-September-2005 | The Bombay Stock Exchange's benchmark 30-share index crossed the 8000 level by buying of foreign and domestic funds in early trading. |
| 9000, 09-December-2005 | On November 28, 2005 crossed 9000, byforeign institutional investors (FII) and well supported by local operators as well as retail investors. |
| 10,000, 07-February-2006 | The Sensex on February 6, 2006 touched 10,003 points, The Sensex finally closed above the 10,000-benchmark on February 7, 2006. Fall below in May 2006, first time five digit figure level. |
| 11,000, 27-March-2006 | The Sensex on March 21, 2006 crossed 11,000, but closed on March 27, 2006. |
| 12,000, 20-April-2006 | The Sensex on April 20, 2006 crossed 12,000 and touched a peak of 12,004 points during trading hours at the Bombay Stock Exchange. |
| 13,000, 30-October-2006 | The Sensex on October 30, 2006 crossed 13,000 for the first time, closed at 13024. |
| 14000, 05-December-2006 | The Sensex on December 5, 2006 crossed 14,000 level. |
| 15,000, 06-July-2007 | The Sensex on July 6, 2007 crossed 15,000 mile stone by strong buy. |
| 16,000, 19-September-2007 | The Sensex on September 19, 2007 crossed the 16,000 mark by positive market sentiment. |
| 17,000, 26-September-2007 | The Sensex on September 26, 2007 touched the 17,000 level for the first time. |
| 18,000, 09-October-2007 | The Sensex on October 9, 2007 crossed the 18,000 level for the first time. |
| 19,000, 15-October-2007 | The Sensex on Oct 15, 2007 crossed the 19,000 mark for the first time with positive trend. |
| 20,000, 29-October-2007 | The BSE .Sensex on October 29, 2007 crossed the 20,000 mark for the first time |
| 21,000, 08-January-2008 | The Sensex on January 8, 2008 touched all time high of 21078 before closed at 20873. |
| Name of Year | Sensex Value (points) |
|---|---|
| 1991 | 1,908 |
| 1992 | 2,615 |
| 1993 | 3,346 |
| 1994 | 3,926 |
| 1995 | 3,110 |
| 1996 | 3,085 |
| 1997 | 3,658 |
| 1998 | 3,055 |
| 1999 | 5,005 |
| 2000 | 3,972 |
| 2001 | 3,262 |
| 2002 | 3,377 |
| 2003 | 5,838 |
| 2004 | 6,602 |
| 2005 | 9,397 |
| 2006 | 13,786 |
| 2007 | 20,286 |
| 2008 | 9,647 |
| 2009 | 17,464 |
| 2010 | 20,509 |
| 2011 | 18,446 |
| Date of Sensex Fall | Number of points crash |
|---|---|
| 21-January-2008 | 1,408 |
| 24-October-2008 | 1070 |
| 17-March-2008 | 951 |
| 06-July-2009 | 870 |
| 22-January-2008 | 857 |
| 11-February-2008 | 833 |
| 18-May-2006 | 826 |
| 10-October-2008 | 800 |
| 13-March-2008 | 770 |
| 17-December-2007 | 769 |
Major issues to Sensex fall
Participatory notes ( P-Notes ) issue, Subprime crisis of US, Foreign Institutional Investors (FIIs) Sell-off, Stock market manipulation scams,
| Name of Company | Industry / Sector |
|---|---|
| Bajaj Auto | Automobiles |
| Bharti Airtel | Telecom |
| BHEL | Electrical |
| Cipla Ltd | Pharmaceutical |
| DLF Ltd | Construction |
| HDFC | Finance |
| HDFC Bank | Banks |
| Hero Honda | Automobile |
| Hindalco | Aluminium |
| Hindustan Unilever | FMCG / Diversified |
| ICICI Bank | Banks |
| Infosys Technologies | Software / Computers |
| ITC Ltd | Cigarettes |
| Jaiprakash Associates | Construction |
| Jindal Steel | Steel |
| Larsen and Toubro | Engineering |
| Mahindra and Mahindra | Auto |
| Maruti Suzuki | Automobile |
| NTPC | Power |
| ONGC | Refinaries |
| Reliance Communication | Telecommunication |
| Reliance Industries | Refinaries |
| Reliance Infrastructure | Power |
| State Bank of India | Banks |
| Sterlite Industries | Metals |
| TATA Motors | Automobile |
| Tata Power | Power Generation |
| TATA Steel | Steel |
| TCS Limited | Software / Computers |
| WIPRO | Software and Computers |