What is Sensex ?

what is sensex

What is Sensex?

Full-Form of Sensex is the Sensitive Index. The stock market is one of the most popular investment avenues in India. S&P BSE Sensex index, which is the benchmark index of the Bombay Stock Exchange (BSE) in India. Many people park their savings in the Indian stock market in the hope of generating manifold returns and create wealth for them. Sensex is mainly representing the top 30 stocks that are listed on the Bombay Stock Exchange. These stocks are selected based on its providing an accurate gauge of India’s economy.

The Sensitive Index is the benchmark record of the Indian Capital Markets with wide acknowledgment among individual Investors, foreign investors, and fund chiefs. The destinations of Sensex are the following:

      •  To measure market movements
      • Benchmark for funds performance
      • For index-based derivative products
  •  To measure market movements:
    A measure of volatility gives ample information for an investor to base his decision. The time to enter, buy or sell, is a critical decision that depends on market moods. The investor can use the Beta value of a stock to understand its volatility.
  •  Benchmark for funds performance:
    A benchmark indicates directly the fund manger’s performance. These are the group of securities that are considered as a benchmark to measure a fund’s /stock performance.

Also see Fund Categories, Mutual Fund, Hedge fund, ETF, and Index Funds.

  •  For Index based derivative products:
    Index derivatives are generally futures contracts that are based on stock or financial index like Sensex. Index futures are used to speculate on the direction of price movement for an index such as the S&P 500.

Investors and investment managers also use index futures to hedge their equity positions against losses.

Sensex Index Chart

Base Year
1978-79
Base Index Value
100
Date of Launch
01-01-1986
Method of calculation
Launched on full market capitalization method and effective September 01, 2003, the calculation method shifted to free-float market capitalization.
Number of Scrips
30
Index calculation frequency
15 seconds

Let us look at some numbers.

  • The number of stocks in the Sensex – 30
  • As of March 15, 2017, the Full Market capitalization of Sensex is 4,986,299 crores and the free-float market capitalization is Rs. 2,687,777 crores.  Sensex chartSensex Chart

Sensex Milestone :

The Sensex is rising consistently from the day it started though there were many crashes and scandals affected the performance in various stages. The Stock market barometer Sensitive Index on December 11 won over the 20,000 point mark after flirting with it for as many as 45 days– the third-longest courtship for a thousand-point milestone. Sensitive Index has got a long history and of course a great success story behind it.

1000, July 25, 1990

On July 25, 1990, the Sensex touched the four-digit figure for the first time and closed at 1,001 in the wake of a good monsoon and excellent corporate results.

2000, January 15, 1992

On January 15, 1992, the Sensitive crossed the 2,000-mark and closed at 2,020 followed by the liberal economic policy initiatives undertaken by the then finance minister and current Prime Minister Dr. Manmohan Singh.

3000, February 29, 1992

On February 29, 1992, the Sensex surged past the 3000 marks in the wake of the market-friendly Budget announced by the then Finance Minister, Dr. Manmohan Singh.

4000, March 30, 1992

On March 30, 1992, the Bombay Stock Exchange(BSE) crossed the 4,000-mark and closed at 4,091 on the expectations of a liberal export-import policy. It was then that the Harshad Mehta scam hit the markets and Sensex witnessed unabated selling.

5000, October 8, 1999

On October 8, 1999, the Sensex crossed the 5,000-mark as the BJP-led coalition won the majority in the 13th Lok Sabha election.

6000, February 11, 2000

On February 11, 2000, the infotech boom helped the Sensex to cross the 6,000-mark and hit an all-time high of 6,006.

7000, June 20, 2005

On June 20, 2005, the news of the settlement between the Ambani brothers boosted investor sentiments and the scrips of RIL, Reliance Energy, Reliance Capital, and IPCL  made huge gains. This helped the Sensex crossed 7,000 points for the first time.

8000, September 8, 2005

On September 8, 2005, the Bombay Stock Exchange’s benchmark 30-share index – the Sensex – crossed the 8000 levels following brisk buying by foreign and domestic funds in early trading.

BSE

9000, November 28, 2005

The Sensex on November 28, 2005, crossed the magical figure of 9000 to touch 9000.32 points during mid-session at the Bombay Stock Exchange on the back of frantic buying spree by foreign institutional investors and well supported by local operators as well as retail investors.

10,000, February 6, 2006

The Sensex on February 6, 2006, touched 10,003 points during mid-session. The Sensex finally closed above the 10K-mark on February 7, 2006.

11,000, March 21, 2006

The Sensex on March 21, 2006, crossed the magical figure of 11,000 and touched a life-time peak of 11,001 points during mid-session at the Bombay Stock Exchange for the first time. However, it was on March 27, 2006, that the Sensex first closed at over 11,000 points.

12,000, April 20, 2006

The Sensex on April 20, 2006, crossed the 12,000-mark and closed at a peak of 12,040 points for the first time.

13,000, October 30, 2006

The Sensex on October 30, 2006, crossed the magical figure of 13,000 and closed at 13,024.26 points, up 117.45 points or 0.9%. It took 135 days for the Sensex to move from 12,000 to 13,000 and 123 days to move from 12,500 to 13,000.

14,000, December 5, 2006

The Sensex on December 5, 2006, crossed the 14,000-mark to touch 14,028 points. It took 36 days for the Sensitive to move from 13,000 to the 14,000 marks.

15,000, July 6, 2007

The Sensex on July 6, 2007, crossed the magical figure of 15,000 to touch 15,005 points in afternoon trade. It took seven months for the Sensex to move from 14,000 to 15,000 points.

16,000, September 19, 2007

The Sensex scaled yet another milestone during early morning trade on September 19, 2007. Within minutes after trading began, the Sensex crossed 16,000, rising by 450 points from the previous close. The 30-share Bombay Stock Exchange’s sensitive index took 53 days to reach 16,000 from 15,000. Nifty also touched a new high at 4659, up 113 points.

The Sensex finally ended with its biggest-ever single-day gain of 654 points at 16,323. The NSE Nifty gained 186 points to close at 4,732.

17,000, September 26, 2007

The Sensex scaled yet another height during early morning trade on September 26, 2007. Within minutes after trading began, the Sensex crossed the 17,000-mark. Some profit-taking towards the end saw the index slip into the red to 16,887 – down 187 points from the day’s high. The BSE ended with a gain of 22 points at 16,921.

18,000, October 09, 2007

The BSE Sensex crossed the 18,000-mark on October 09, 2007. It took just 8 days to cross 18,000 points from the 17,000 marks. The index zoomed to a new all-time intra-day high of 18,327. It finally gained 789 points to close at an all-time high of 18,280. The market set several new records including the biggest single-day gain of 789 points at the close, as well as the largest intra-day gains of 993 points in absolute term backed by frenzied buying after the news of the UPA and Left meeting on October 22 put an end to the worries of an impending election.

19,000, October 15, 2007

The Sensex crossed the 19,000-mark backed by the revival of funds-based buying in blue-chip stocks in metal, capital goods, and refinery sectors. The index gained the last 1,000 points in just four trading days. The index touched a fresh all-time intra-day high of 19,096 and finally ended with a smart gain of 640 points at 19,059. The Nifty gained 242 points to close at 5,670.

20,000, December 11, 2007

The Sensitive Index actually crossed the 20,000-mark on October 29, 2007, during intra-day trading but closed at 19,977.67 points. However, it was on December 11, 2007, that it finally closed at a figure above 20,000 points on the back of aggressive buying by funds. The 30-share index spurted 360.21 points to fly-past the crucial level and closed at 20,290.89. The NSE Nifty closed at a record high of 6,097.25 points, up 136.65.

The Sensex has increased by over 14 times from 1991 and has galloped around 2000 points in 100 days of the New Government….

The benchmark closed above 27000 points for the 1st time on September 02, 2014 coinciding with 100 days of the MODI-GOVERNMENT. The BSE Sensex is a witness of the evolution of the Indian economy, having passed many milestones in the last 40 years, The Sensitive has journeyed from 100 points to close at a level of high crossing the 39K-mark on 1 April 2019 its 40th birthday. The growth over the last 40 years represents a 16% CAGR return to the shareholders.

 

25,000, 16 May 2014

While the sub-prime crisis was a major setback to the index, the Sensitive successfully rebuilt from the lows of 2007, to surge past the crucial 25,000-mark in 2014, after Narendra Modi-led BJP stormed to power.

27,000, 2 September 2014

The SENSEX closed at 27,019.39, for its first close above the 27,000 level, on 2 September 2014. This is the sixth 1000-point milestone the index has crossed in 2014, tying a record set in 2007.

30,000, 4 March 2015 

Sensex spurred to cross the 30,000-mark backed by global liquidity provided by central banks of major economies in less than a year. The Sensitive gained past the 30,000-mark on March 4, 2015, less than one year after it had hit the 30,000-mark.

 36,000, 23 January 2018

Sensex touched a record high of 36,000 in January 2018 on the back of IMF’s prediction about India’s growth, which boosted the investor sentiment.

38,000, 9 August 2018 

Sensex crossed the 38,000 marks in August 2018 on account of India’s economic growth expectations. Interestingly, the 8000 point gain took less than four years.

39,000, 1 April 2019

The 30 share index moved beyond the 39,000-mark on April 1, 2019, on its 40th birth anniversary. In effect, in the last 40 years, the Sensex has risen 560 times. The stellar growth works out to a CAGR of more than 16%.

sensex

Difference Between Nifty and Sensex :

Nifty and Sensex

Basis Nifty Sensex
Stands For Nifty stands for National fifty. Sensex stands for Sensitive Index.
Derived from Nifty got its name from National Fifty. So the full form of Nifty is National Fifty. Sensex derived its name from sensitive index i.e. Sensitive Index is the full form of Sensex.
Composition Nifty is calculated after considering 50 stocks Sensex is calculated after considering 31 stocks
Sectors Covered Nifty covers 24 different sectors Sensitive captures the sentiments of 12 sectors
Date of Commencement: Nifty was established on April 21, 1996 Sensex was established on September 1, 2003
Base year The base year of Nifty is 1995 with the base value of 1000 The base year of Sensex is 1978-79 with the base value of 100
Trading on Foreign exchanges Nifty is traded on Singapore exchanges as SGX Nifty and on Chicago Mercantile Exchange as CME Nifty Sensitive is traded on Dubai Gold and Commodity Exchange, DGCX
Operated by Nifty is maintained by India Index Services and Products, which is a subsidiary of NSE Sensex is maintained by BSE
Market Capitalization NSE market capitalization is around 29% Sensex 30 Index share of BSE market capitalization is around 25%

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