Sensex, or the S&P BSE Sensex, is the benchmark stock market index of India. It is a free-float market-capitalisation-weighted index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE).\r\nHow is Sensex calculated?\r\nThe Sensex is calculated by taking the sum of the closing prices of the top 30 stocks in the index, multiplied by their respective weights. The weights are based on the free-float market capitalisation of each stock, dividing this value by the Base market capitalisation, multiplying it by the base value of the index\r\nThe formula for Sensex:\r\n\r\nSensex = Free float market capitalisation of 30 companies / Base market capitalisation * Base value of the index.\r\n\r\n
\r\nFor Sensex calculation, the base year to calculate Sensex is 1978-79 and the base value is static, Rs. 2501.24 crore is to be used as the base market capitalisation and a value is 100 is taken as base value\r\nSo, the final formula for calculation Sensex is:\r\n\r\nSensex = Free float Market Capitalisation of 30 firms / 25041.24 crores * 100\r\n\r\n\r\n
\r\nFree-float market capitalisation is the total market capitalisation of a company's shares that are available to the public for trading.\r\nLet\u2019s try to understand with an example, let's say that the Sensex is made up of 3 stocks, with the following weights:\r\n\r\n
\r\nThe Sensex value is calculated at the end of each trading day. The index is also updated intraday, but the intraday changes are not considered for the calculation of the Sensex value at the end of the day.\r\nIn simple terms, the Sensex is a measure of the overall performance of the 30 largest and most liquid stocks on the Bombay Stock Exchange (BSE). The higher the Sensex value, the better the performance of the Indian stock market.\r\nHow to invest in Sensex?\r\nInvesting in the Sensex involves investing in the underlying stocks that constitute the index. This can be achieved through various means:\r\n\r\n
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\r\nConclusion:\r\nThe Sensex is more than just a numerical representation of stock prices; it reflects India's economic landscape and investor sentiment. As an essential benchmark, it provides insights into the performance of India's top companies across various sectors. Investors use Sensex to gauge market trends, make informed investment decisions, and monitor economic health. The index's journey through various milestones underscores the dynamism of India's financial markets and the broader economy, making it a critical tool for investors seeking exposure to India's growth story.\r\nUse the Bajaj Financial Securities Limited (BFSL) Platform to invest in your choice of securities now.\r\n", "dateModified": "16 August 2023", "mainEntityOfPage": "@type": "Website", "@id": " -is-sensex" , "@context": " ", "headline": "What is Sensex"} Disclaimer While care is taken to update the information, products, and services included in or available on our website and related platforms/ websites, there may be inadvertent inaccuracies or typographical errors or delays in updating the information. The material contained in this site, and on associated web pages, is for reference and general information purpose and the details mentioned in the respective product/ service document shall prevail in case of any inconsistency. Subscribers and users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/ service document and applicable terms and conditions. In case any inconsistencies are observed, please click on reach us.