The BSE SENSEX (also known as the S&P Bombay Stock Exchange Sensitive Index or simply the SENSEX) is a free-float stock market-weighted index of 30 well-established and financially sound BSE stocks. The 30 constituent firms, which are among the biggest and most actively traded stocks, are representative of the Indian economy’s various industrial sectors. The S&P BSE SENSEX, issued since 1 January 1986, is seen as the heartbeat of India’s domestic stock markets. From 1 April 1979, the SENSEX stock value was taken as 100, and it’s base year as 1978–79. BSE released a dollar-linked version of the SENSEX, DOLLEX-30, on 25 July 2001.
The BSE has some evaluations and adjusts its structure to ensure that it is representative of current market conditions. The index is determined using a form of free-float capitalization, a variant of the method of market capitalization. Rather than using the existing shares of a company it chooses the float or securities that are readily available for trading. Free Floating capital means overall capitalization with less shareholding by management. According to the free float capitalization approach, the index ratio represents the free-float market value of 30 constituent stocks compared to the base rate at any point in time.
A company’s market capitalization is measured by calculating the stock price by the number of shares sold by private shares, replacing documents. From June 1990 to the present, the index has increased by more than twenty-five times. The long-run rate of return on the S&P BSE SENSEX averages out to be 18.6 percent per year using details from April 1979 onwards.
The 30 constitutes of S&P BSE SENSEX as of December 24, 2019.
Kotak Mahindra Bank
Larsen & Toubro
Mahindra & Mahindra
Nestle India Ltd
Power Grid Corporation of India
State Bank of India
Tata Consultancy Services
Titan Co Ltd
UltraTech Cement Ltd