Are you one of those people who skips over the market section of the newspaper because of financial jargon? If so, one word that almost always appears in headlines is Sensex. Have you ever wondered why the Sensex’s ups and downs are usually the talk of the town? Let’s set the record straight and explain what it is and how it affects your finances.
What is BSE?
The BSE stands for Bombay Stock Exchange. It was founded in 1875 and is located on Dalal Street in Mumbai, India. With a speed of 6 microseconds, it is Asia’s first and quickest stock exchange. In addition, the BSE was the first stock exchange in India to be listed.
The BSE supports efficient and transparent trading in the stock, mutual funds, derivatives, debt instruments, and currencies. Aside from trading, it also offers risk management, clearing and settlement, and investor education.
By offering a venue for capital raising, the BSE has played an important role in establishing and expanding Indian financial markets. BSE SME is another name for BSE. It serves as a trading platform for approximately 250 small and medium-sized businesses. It also offers mutual fund services via BSE StAR MF. It is also the largest mutual fund platform in India. BSE Bond is also a transparent electronic book mechanism approach for a private offering of debt securities. It also has an international exchange, India INX, which is the country’s first.
The BSE Sensex is the most popular equity index on the BSE. It is one of the most popular and extensively followed indices. Furthermore, the BSE Sensex trades on EUREX as well as the exchanges of Brazil, Russia, China, and South Africa (BRCS nations).
What is BSE Sensex?
Mr Deepak Mohoni, a stock market expert, coined the word Sensex. The name Sensex is a combination of the words sensitive and index. The Sensex is an indicator that represents the performance of the Bombay Stock Exchange (BSE).
On the BSE, the Sensex Index consists of 30 equities. These are the most important and actively traded equities on the BSE. The following are the stock selection criteria:
- Listed on BSE
- It is expected to be a large to mega-cap stock.
- Stocks that are relatively liquid
- Core activities create revenue.
- Sector involvement that is diverse and balanced in accordance with the Indian equities market.
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How To Calculate Sensex?
The Sensex measures the performance of the Indian stock market. If the Sensex rises, the prices of the underlying 30 equities rise as well. If the Sensex falls, it signifies that the values of the underlying 30 equities have fallen.
The Sensex is India’s oldest index, and it is widely regarded as a measure of the Indian economy. Market research specialists look to the Sensex to comprehend general growth, industry development, and the country’s stock market trend.
First, the 30 equities required to be included in the SENSEX are listed, and then the market capitalization of each of the 30 firms is calculated. After that, the Free Float Market Capitalisation of each of the 30 firms is calculated and subsequently added up to establish the overall Free Float Market Capitalisation. Keep in mind that, according to the Free float methodology, the index level at any one moment represents the Free-float market value of 30 component companies compared to a base period.
Market Capitalization x Free Float Factor = Free-Float Market Capitalization
Free Float factor is the percentage of a company’s issued shares that are freely accessible for trading on the market. It does not include the shares held by promoters, the government, etc.
And market capitalization signifies the company’s valuation. Market capitalization is calculated by multiplying the price of a stock by the number of shares issued by the corporation.
Sensex is (total free float market capitalization/Base market capitalization) x Base index value. The basis year for the Sensex calculation is 1978-79, and the base index value is 100.
List of BSE Sensex Companies
|Company||Close Price (As of 30th Nov 2022)|
|Asian Paints Ltd||3133.75|
|Axis Bank Ltd||891.85|
|Bajaj Finance Ltd||6734.65|
|Bajaj Finserv Ltd||1632.2|
|Bharti Airtel Ltd||835.7|
|Dr Reddy’s Laboratories Ltd||4452.55|
|HCL Technologies Ltd||1128.1|
|HDFC Bank Ltd||1597.65|
|Hindustan Unilever Ltd||2633.4|
|Housing Development Finance Corp||2665.1|
|ICICI Bank Ltd||946.95|
|IndusInd Bank Ltd||1180|
|Kotak Mahindra Bank Ltd||1925.95|
|Larsen & Toubro Ltd||2049.65|
|Mahindra & Mahindra Ltd||1256.95|
|Maruti Suzuki India Ltd||8911.35|
|Nestle India Ltd||20118.55|
|Power Grid Corp of India Ltd||219.3|
|Reliance Industries Ltd||2711.05|
|State Bank of India||608.4|
|Sun Pharmaceutical Industries Ltd||1049.55|
|Tata Consultancy Services Ltd||3397.1|
What Is The Price Of Sensex Live Today?
BSE SENSEX Share Price (As of 30th November 2022)
If Sensex rises, it means that the stock prices of the majority of the largest businesses listed on the BSE would also increase. If the Sensex falls, on the other hand, it signifies that the majority of the main equities listed on the BSE have seen a decline in price.