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Sensex

Sensex is the value-weighted index of the companies listed on the stock exchange. Bombay Stock Exchange (BSE) in 1986 came out with a stock index that consequently became the barometer of the Indian stock market. Sensex is a basket of 30 constituent stocks representing an illustration of large, liquid and representative companies. That's why it's also known as BSE 30 Sensex. The base year of sensex is 1978-79 and the base value is 100.

Sensex is calculated using the "Free-float Market Capitalization" methodology. As per this methodology, the level of index at any point of time reflects the Free-float market value of 30 component stocks relative to a base period. The market capitalization of a company is calculated by developing the price of its stock by the number of shares issued by the company. This market capitalization is further multiplied to resolve the free-float market capitalization by the free-float factor Sensex is not only logically designed but also based on globally accepted construction and review methodology.

First compiled in 1986, SENSEX is a basket of 30 constituent stocks representing a sample of large, liquid and representative companies. The base year of SENSEX is 1978-79 and the base value is 100. The index is extensively reported in both domestic and international markets through print as well as electronic media. Due to is extensive acceptance amongst the Indian investors; SENSEX is regarded to be the pulse of the Indian stock market. As the oldest index in the country, it provides the time series data over a fairly long period of time.

Small wonder, the SENSEX has over the years become one of the most prominent brands in the country. The growth of equity markets in India has been phenomenal in the decade. Right from untimely nineties the stock market witnessed heightened activity in terms of various bull and bear runs. The SENSEX captured all these events in the most judicial manner. One can identify the booms and busts of the Indian stock market through SENSEX.