What is Sensex (BSE Sensex)? - Definition from WhatIs.com

Definition

Sensex (BSE Sensex)

The Bombay Stock Exchange's Sensitive Index, also called Sensex or BSE Sensex, is one of the leading stock market benchmark indices in India. It  tracks the movement of stock prices on the exchange and functions as an indicator of market sentiments.

Launched by BSE in 1986, Sensex consists of 30 components (stocks) that represent, broadly, the composition of the entire market. Each of the scrips is assigned a weightage on the index that is linked to its market capitalization. It measures a particular stock's ability to influence movements in the index. The base year of the Sensex is 1978-79 with the base index value taken as 100 points.

While the number of components has remained the same since its inception, the composition of the Sensex changes periodically as scrips are inducted or removed depending on their market capitalization, frequency and volume of trading and volatility among other parameters.

For a long time the BSE Sensex was the only benchmark index in India for the stock markets until the National Stock Exchange was launched in the early nineties. Its S&P Nifty Index is a much broader index, but the Sensex is still followed as a barometer of market sentiment in India.

This was last updated in September 2012
Posted by: Margaret Rouse

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