What is Sensex? Sensex is a market-weighted stock index of 30 well-established and financially viable companies listed on the Bombay Stock Exchange.
Do you know what is Sensex? You have often read or seen the word Sensex on television or in the newspaper. Sometimes you see the Sensex go up a lot of points today, and sometimes you see the Sensex go down a lot of points today.
Whenever you think about investing in the stock market, you should think of Sensex. But you can’t understand the meaning of this word because you don’t know what is Sensex.
So our post today focuses on Sensex. Today, through this post, we will know what is Sensex and what is done through it.
Sensex is like Nifty, but only 30 companies are listed on Sensex compared to Nifty. Where Nifty is called Nifty 50 as a list of 50 companies. Let us know the details of Sensex.
What is Sensex?
The SENSEX is the BenchMark index of our Indian stock market, which indicates the rise and fall in the prices of shares listed on the BSE (Bombay Stock Exchange). Through this, we get information about the performance of the 30 largest companies listed in it.
Speaking of the Sensex, it is the oldest stock market index in India, starting in 1986.
Track all the stock prices of publicly listed companies and then give us an average price after a day of hard work so that we can easily get information about the stock boom and the slowdown of publicly listed companies.
The Bombay Stock Exchange (BSE), the oldest stock exchange in India, covers a total of 30 large Indian companies. These companies are very large in terms of market capitalization, which is now 37% of India’s total GDP. These companies somehow work to determine trends in the Indian market.
Sensex is an index designed to determine the share price of the largest companies in India, which monitors the rise in the share prices of these companies.
How is Sensex made?
Now we have talked about what is SENSEX? Now we will know how Sensex is made and who it is made by, we will understand the process of its formation.
As we know, Sensex is part of the Bombay Stock Exchange and consists of the shares of thirty companies listed on the Bombay Stock Exchange, where the total number of companies listed on the Bombay Stock Exchange.
When Sensex is calculated, only 30 prominent companies are included in their shares. The reason behind including the share prices of these 30 companies is that the shares of these 30 companies buy and sell more.
Second, it is the 30th largest company, whose market capitalization is about half of all the shares listed on the stock exchange, which is a great achievement.
The third reason is that these 30 companies have been selected from 13 different sectors, these 30 companies are considered the largest in their sector.
These 30 companies are selected by the Stock Index Committee. The committee is made up of people from many departments, mainly governments, banks, and recognized economists.
How does Sensex decrease or increase?
The Sensex is its job to provide us with share information. It monitors the fluctuations in the stocks of 30 companies under it.
If the value of shares in the market of listed companies in the Sensex is increasing, then the Sensex also increases and goes up.
At the same time, if the market price of companies listed on the Sensex continues to decrease, the Sensex also starts falling.
The most important reason for the decrease in stock prices is the performance of those companies.
For example, if the company launches a new and larger project on the market, the company’s stock price is likely to rise.
Similarly, if the company is struggling, people want to resign and the shares start selling in bulk. As the volume of the shares increases, the price of the shares decreases, and the Sensex begins to decrease.
On what basis are 30 companies selected?
The issues that the Index Committee addresses when selecting 30 companies for inclusion in Sensex are:
1) The shares of that company must be listed on the stock exchange for at least 1 year or more.
2) It is mandatory to buy and sell the shares of the company whose stock market has been open in the last year.
3) According to the number and value of average daily trades, these companies must be among the largest 150 companies in the country.
These are matters for the Index Committee to consider for enrollment.
Top 30 companies that perform better
The 30 companies involved in Sensex were first involved in 1986. All of these companies are financially sound and have large market limits. The demand for shares of these companies is always in the stock market.
Such companies are called “blue chip” companies. The Sensex of the Bombay Stock Exchange currently has a total of 31 companies. Below is a list of companies listed on the BSE Sensex.
1) Adani Ports and Special Economic Zone Ltd.
2) Asian Paints
3) Axis Bank Ltd.
4) Bajaj Auto Ltd.
5) Bharti Airtel Ltd.
7) Coal India Ltd.
8) Dr. Reddys Laboratories Ltd.
9) HDFC Bank Ltd
10) Hero MotoCorp Ltd.
11) Hindustan Unilever Ltd.
12) Housing Development Finance Corporation Ltd.
13) ICICI Bank Ltd.
15) Infosys Ltd.
16) Kotak Mahindra Bank Ltd.
17) Larsen & Toubro Ltd.
19) Mahindra & Mahindra Ltd.
20) Maruti Suzuki India Ltd.
21) NTPC Ltd.
22) Oil & Natural Gas Corporation Ltd.
23) Power Grid Corporation Of India Ltd.
24) Reliance Industries Ltd.
25) State Bank Of India
26) Sun Pharmaceutical Industries Ltd.
27) Tata Consultancy Services Ltd.
28) Tata Motors
29) Tata Motors – DVR Ordinary
30) Tata Steel Ltd.
31) Wipro Ltd.
At the moment, these companies somehow govern the Indian market. All these companies are important companies in their respective sectors and each company presents its sector in Sensex from afar.
Benefits of SENSEX
Sensex’s biggest advantage is that it allows investors to know and understand future changes in the market and wisely invest their money accordingly.
However, we do have some Sensex benefits that don’t directly affect or benefit much, but indirectly they are quite effective. The movement of the rupee changes according to the market and when the rupee strengthens, things in the country become cheaper. Let’s learn about some of the benefits.
1) When companies see Sensex rise, investors want to invest in such companies too, and when there is too much money from investors, companies grow and expand. And every time a company expands, it needs new people for it, in which case they will hire more people and that means a direct reduction in unemployment.
2) When the stock market is good and the Sensex rises, many foreign investors start coming to the country and when they invest money in Indian companies, the rupee will increase. And the rupee is stronger against foreign currencies.
And when the rupee strengthens, things start to get cheaper. For example, salmon that comes in a foreign currency will be cheaper than money at a lower price.
The Indian stock market continues to rise, it was only a thousand when it started in 1990, but today the number has reached five figures, today it has exceeded 30,000.
And setting new records every day. We hope it will reach new heights in the future and help investors make a profit.
The stock market can be a risky investment for you if you don’t know the behavior of the market. Invest in the stock market very carefully and get complete information before investing.
I hope you understand what is Sensex. I request all of your readers to share this information with their neighbors, family, and friends so that we will have awareness among us and everyone will benefit a lot from it. I need your support so that I can convey more new information to you.
However, if you see any deficiencies in our post please leave your feedback in the comment box and help us correct that deficiency, thanks.