The BSE SENSEX is a stock market index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE). The BSE Sensex is regarded as the pulse of the domestic stock markets in India. Let us know about 8 key things that will help you understand about the Sensex.
S&P BSE Sensex is a globally famous stock index, a collection of 30 listed stocks in India. It was first compiled in 1986. Today, S&P BSE Sensex is a basket of 30 constituent stocks representing large, liquid and representative companies. The base year of S&P BSE SENSEX is 1978-79. The BSE Sensex is looked at a crucial indicator of the market movement in India. Investors tracks the BSE Sensex during market trade hours. For those who want to know, the NSE Nifty is an index of 50 constituent stocks.
Shares/stocks have economic value and that value is expressed in Rupees. The BSE Sensex is an index. Its value is not expressed in Rupees. The index value is expressed in terms of points. You must have heard the news that the BSE Sensex has touched 40,000. The figure of 40,000 is actually 40,000 points.
The index was initially calculated based on the ‘Full Market Capitalization' methodology. From September 2003, the index was shifted to the 'Free-float' methodology. The Free-float market capitalization methodology of index construction is regarded as an industry best practice globally.
Free-float market capitalization is equal to (current market price of the stock) multiplied by (total number of shares available for public for trading). In free-float market capitalization, only those shares who do not have any lock-in period and are freely available for trading are taken into consideration. As less number of shares are used while calculating free-float, the free-float market capitalization is always less than the full market capitalization of any company.
The BSE Sensex value is computed in real time based on the stock price movements of its index constituents. The sum of the contributions of all the 30 companies is what forms the change in the BSE Sensex today over yesterday’s value. For NSE Nifty today value, the calculation process is similar but here contributions of all 50 stocks are taken.
Get more information about NSE indices with Nirmal Bang
The BSE Sensex at present has stocks from 11 sectors. Finance has 45.79% weight, followed by Information Technology (14.83%), Oil & Gas (11.23%), FMCG (9.09%), Transport Equipments (6.18%), Capital Goods (4.71%), Power (2.45%), Metal, Metal Products & Mining (1.66%), Telecom (1.53%), Chemical & Petrochemical (1.52%) and Healthcare (1.01%). The weight data is as on July 5, 2019 closing values. This can change when stocks move up or down in the future.
Know each stock from sectors account for weight in BSE Sensex.
As you BSE Sensex has 30 stocks, like NSE Nifty has 50 stocks.
Coming back to BSE Sensex, the list of stocks are Asian Paints Ltd, Axis Bank Ltd, Bajaj Auto Ltd, Bajaj Finance Ltd, Bharti Airtel Ltd, HCL Technologies Ltd, HDFC Bank Ltd, Hero MotoCorp Ltd, Hindustan Unilever Ltd, Housing Development Finance Corp, ICICI Bank Ltd, IndusInd Bank Ltd, Infosys Ltd, ITC Ltd, Kotak Mahindra Bank Ltd, Larsen & Toubro Ltd, Mahindra & Mahindra Ltd, Maruti Suzuki India Ltd, NTPC Ltd, Oil & Natural Gas Corp Ltd, Power Grid Corp of India Ltd, Reliance Industries Ltd, State Bank of India, Sun Pharmaceutical Industries Ltd, Tata Consultancy Services Ltd, Tata Motors Ltd, Tata Steel Ltd, Tech Mahindra Ltd, Vedanta Ltd and Yes Bank Ltd.
These stocks determine where the BSE Sensex Today is. During trade, as the stocks move up or down, the point value of BSE Sensex also will change.
Find out the historical returns of Sensex stocks.
The S&P BSE Sensex has become a brand. It has found wide acceptance among individual investors, institutional investors, foreign investors and fund managers. The objectives of the index are 4-fold
The Index Cell of the BSE does the day-to-day maintenance of the index within the broad index policy framework set by the Index Committee. The committee of the exchange comprises of experts on capital markets from all major market segments.
The underlying for the S&P BSE Sensex Futures is the BSE Sensitive Index of 30 securities, popularly called the S&P BSE Sensex. The ticker symbol is BSX. The trading timings for the derivatives segment of BSE are same as equity segment i.e. from 9:15 am to 3:30 pm.
Presently, the SEBI has permitted futures products of 1 month, 2 months and 3 months maturity only on a rolling basis. On 9th June 2000, when the equity derivatives were first introduced in India at BSE, it was with the three monthly series for June, July and August 2000.
The closing value of S&P BSE Sensex in the cash market is taken as the final settlement price of the Futures contract on the last trading day of the contract for settlement purpose.