What Is Sensex And How Are Those Numbers Calculated?
If you want to invest in the Indian share market today, you need to get the basics right first. And of course, the first basic thing you should know before you start wondering what shares to buy today is what constitutes the Sensex. Sensex is short for S&P Bombay Stock Exchange Sensitive Index.
The Sensex is basically an index of the 30 largest and most actively traded stocks on the BSE, and representative of various industrial sectors of the economy. Whenever you head to the investment portal to check out online share prices or look at the Indian share market live, the Sensex is one of the first things you check out.
The Sensex helps you to gauge the mood of the Indian share market today so that you can make your investment decisions. Some of the 30 scrips that make up the Sensex are HDFC, Cipla, ONGC, State Bank of India, Reliance Industries, Tata Power, Wipro, Infosys and Sun Pharmaceutical. Many people decide on how many shares to buy today according to the way the Sensex behaves.
The Sensex is calculated according to the free float capitalization method, that is, according to the number of shares available for trading, instead of a companys outstanding shares. The calculation is done by dividing the free float capitalization of 30 companies in the Sensex by a number called the index divisor. The divisor allows the index to be comparable over time.
The shares that compose the Sensex are changed from time to time to reflect the current market conditions. For example, in 1990, the Sensex was dominated by sectors like automobiles, cement, engineering, FMCG and textiles. Today, there are industries like IT, finance, power, oil and gas etc.
The Sensex began at 100 in the year 1979 and stayed at that level till the mid-80s. It touched the four-digit figure for the first time in 1990. Since then, the Sensex has been steadily rising, and reached an all-time high of 21,078 on 29 October 2007. As of April 2013, it was hovering around the 19,000 mark.
As you may have noticed while checking out the Indian share market live on TV or your PC, the Sensex is pretty important. However, you might also notice while looking at online share prices that not all shares behave alike. The Sensex is made up of certain large-cap stocks in certain sectors, and there are lots of scrips in the market. As they say, all scrips are not equal.
There are many other indices that give you an idea of how share prices in particular sectors are moving. Some of these include S&P BSE Mid Cap, Small Cap, S&P BSE 100/ 200/ 500, Greenex, Carbonex, IPO, Healthcare, IT, Oil & Gas, Auto, Metal, PSU, Bankex, Realty and so on. So depending on the area/ sector you are interested in, you can pick the index you like to make your investment decisions.
The Sensex is basically an index of the 30 largest and most actively traded stocks on the BSE, and representative of various industrial sectors of the economy. Whenever you head to the investment portal to check out online share prices or look at the Indian share market live, the Sensex is one of the first things you check out.
The Sensex helps you to gauge the mood of the Indian share market today so that you can make your investment decisions. Some of the 30 scrips that make up the Sensex are HDFC, Cipla, ONGC, State Bank of India, Reliance Industries, Tata Power, Wipro, Infosys and Sun Pharmaceutical. Many people decide on how many shares to buy today according to the way the Sensex behaves.
The Sensex is calculated according to the free float capitalization method, that is, according to the number of shares available for trading, instead of a companys outstanding shares. The calculation is done by dividing the free float capitalization of 30 companies in the Sensex by a number called the index divisor. The divisor allows the index to be comparable over time.
The shares that compose the Sensex are changed from time to time to reflect the current market conditions. For example, in 1990, the Sensex was dominated by sectors like automobiles, cement, engineering, FMCG and textiles. Today, there are industries like IT, finance, power, oil and gas etc.
The Sensex began at 100 in the year 1979 and stayed at that level till the mid-80s. It touched the four-digit figure for the first time in 1990. Since then, the Sensex has been steadily rising, and reached an all-time high of 21,078 on 29 October 2007. As of April 2013, it was hovering around the 19,000 mark.
As you may have noticed while checking out the Indian share market live on TV or your PC, the Sensex is pretty important. However, you might also notice while looking at online share prices that not all shares behave alike. The Sensex is made up of certain large-cap stocks in certain sectors, and there are lots of scrips in the market. As they say, all scrips are not equal.
There are many other indices that give you an idea of how share prices in particular sectors are moving. Some of these include S&P BSE Mid Cap, Small Cap, S&P BSE 100/ 200/ 500, Greenex, Carbonex, IPO, Healthcare, IT, Oil & Gas, Auto, Metal, PSU, Bankex, Realty and so on. So depending on the area/ sector you are interested in, you can pick the index you like to make your investment decisions.
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