SENSEX

Sensex, officially the S&P BSE Sensex, is a benchmark stock market index of the Bombay Stock Exchange (BSE) in India. It tracks 30 financially sound and actively traded companies across major sectors, representing a cross-section of the Indian economy. The Sensex is widely used as a barometer of Indian equity market performance and is frequently cited in financial media as an indicator of market sentiment.

History and base: The index was introduced by the BSE in the 1980s and is calculated with a base value of 100 set in 1978-79. It provides a concise snapshot of overall market movements and is the most followed Indian index by both domestic and global investors.

Composition and methodology: The 30 constituents are selected by the BSE’s Index Committee based on liquidity, trading frequency, and market capitalization, ensuring representation of key sectors. The Sensex uses a free-float market capitalization weighting scheme, so each component’s influence on the index is proportional to its investable float-adjusted value. The index is calculated in real time during trading hours and is published by BSE, with licensing and methodology support from S&P Dow Jones Indices under the S&P BSE Sensex designation.

Maintenance and use: Constituents are reviewed periodically to reflect changing market dynamics. The Sensex serves as a primary benchmark for Indian equity funds, derivatives, and exchange-traded products, and it is a common reference point for assessing relative performance against the broader market. It is distinct from other indices such as the NSE’s Nifty 50.