• Thu. Feb 22nd, 2024

Basic of Indian Stock Market : Sensex – Series – 1

ByThe Rise Insight

Aug 27, 2022
sensexsensex

Sensex is the term also known as BSE SENSEX, which comprises of two words Sensitivity and index.  It is the oldest stock exchange in India and also termed as BSE (Bombay Stock Exchange). The full form of SENSEX is Stock Exchange Sensitive Index.  These firms are also branched as Blue-Chip companies in India.

The index was launched in 1986 and is operated by S&P.

It is calculated in Indian and U.S dollars.

The weighting method is Free-floated Market Capitalisation.  It is operated by ASIA INDEX Pvt. Ltd. The trading symbol of Sensex is ^BSESN.

The top five constituents listed on the index were: –

Reliance Industries.

HDFC Bank

Infosys

Housing Development Finance Corp

ICICI Bank 

Advantages of Sensex: –

Sensex offers greater visibility and enhances a company’s reputation. It raises the market for the company’s shares and also leverages the same valuation.

Nifty comprise 50 stocks is a broader index than Sensex, which contains top 30 performing stocks. It is proven that Sensex is more niche. So, when the market is bullish, the top companies perform better, pushing Sensex higher.

Sensex Calculated: – The Sensex is Calculated using a free- float capitalization method. This method is similar to the market – capitalization weighting method, in which companies are weighted according to their share of the total market capitalization of the index.   

Formula for Sensex calculation is – (total free float market capitalization/ base market capitalization) * base index value. 

Right now, it’s the best time to invest in Sensex. according to studies it is proven that Sensex should cross the 1000 mark and the 200000 before 2030.

Conclusion: – the Sensex is nothing but the indicator of all the major companies of the BSE (Bombay Stock Exchange) if the Sensex goes up, it means that the price of the stocks of most of the major companies on the Bombay Stock Exchange have gone up. And if the Sensex goes down, it indicates that the stock price of most of the major stock on the BSE have gone down because we know that it is a free floated stock market index of 30 well established listed companies by BSE.

By The Rise Insight

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