Do you understand what Sensex is? (What is the Sensex?) You must have often read or seen the word “Sensex” on TV or in newspapers. Sometimes you see Sensex went up by so many points today and sometimes you see that Sensex fell by so many points today.
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When considering investing in the stock market, you must consider the Sensex. But you do not understand the meaning of these words because you do not know what the Sensex is. So, today’s post is focused on this. Today, through this post of ours, we will know what the Sensex is and what work is done through it.
In our earlier post, we explained what Nifty is. Today we are talking about the Sensex. So, Sensex is also like Nifty in a way, but only 30 companies are listed in Sensex as compared to Nifty. Whereas Nifty is also called Nifty 50 as it lists 50 companies. Let us know in detail about what is Sensex.
![Sensex](https://gogst.in/wp-content/uploads/2022/12/9146992_4065113-1024x683.jpg)
What is Sensex?
Deepak Mohini introduced the term “Sensex.” This word is made up of the words sensitive and index. This means that it is a sensory index.
Sensex is the benchmark index of our Indian stock market, which tracks the rise and fall in the prices of shares listed on the BSE (Bombay Stock Exchange). Through this, we get facts about the overall performance of the 30 greatest companies listed in it.
Talking about Sensex is the oldest stock market index in India, which started in 1986.
Sensex is a stock market index, and its most important job is that it keeps looking at the price of all the shares of the companies listed in the stock market and then, after a day’s work, gives us an average value so that we can get the value of the listed companies in the stock market. One can easily get information about the rise and fall in the prices of the shares of the companies.
The Bombay Stock Exchange (BSE), which is the oldest stock exchange in India, houses a total of 30 major Indian companies. These companies are excessively big if seen according to market capitalization, it is currently a total of 37% of the Indian GDP.
These companies work to set the trend of the Indian market in some ways. In simple words, the index created to measure the prices of the shares of the big companies of India, which keeps an eye on the increasing and decreasing prices of the shares of these companies, is called the Sensex.
![SENSEX](https://gogst.in/wp-content/uploads/2022/12/stock-market-chart-virtual-screen-with-woman-s-hand-digital-remix-1024x683.jpg)
How is Sensex Made?
Now we talked about what is Sensex. Now we will know how Sensex is made and by whom it is made, we will understand the process of its making.
As we understand Sensex is a part of the Bombay Stock Exchange and Sensex is made up of the share prices of only thirty companies listed on the Bombay Stock Exchange while the total companies listed in the Bombay Stock Exchange The figure is more than 6000.
When the Sensex is calculated, then only the shares of 30 companies that are prominent in the market are included in it. The reason behind including the share prices of these 30 companies is that the shares of these 30 companies are mostly bought and sold.
Secondly, these are the 30 largest companies, their market cap is almost half of all the shares listed on the stock exchange, which is a huge achievement. The third reason is that these 30 companies are selected from 13 different sectors, and these 30 companies are the biggest in their sector.
The index committee of the stock exchange selects these 30 companies; in this committee, people from many sections are included, including the government, banks, and well-known economists.
If you want to make investments with your money in the stock market,
- Then you can create your account on Discount Broker “Zerodha.” You can shortly and without problems open a Demat account and purchase shares in it. Its link is given below.
Picture from Freepic
![Sensex](https://gogst.in/wp-content/uploads/2022/12/20338998_Stock_market_or_forex_trading_and_graph_on_smartphone-1024x683.jpg)
How Sensex Decreases or Increase?
Sensex’s work is to provide us with stock information. It checks the difficulties in the shares of 30 companies under it. If the market share prices of companies listed in the Sensex are increasing, then the Sensex also increases and goes up.
On the other hand, if the prices of shares of companies listed in Sensex are falling in the market, then Sensex also starts falling.
The most important reason for the prices of shares to go up and down is the performance of those companies. For example, if the company has launched a new and big project in the market, then it is likely that the price of the company’s shares will increase.
Similarly, if the company is going through any difficulty, then people want to leave it and the shares are sold in massive quantities. Due to the high volume of shares, the share prices decrease, and the Sensex starts coming down.
On what basis are 30 companies selected?
The factors that the Index Committee considers while selecting 30 companies for inclusion in the Sensex are as follows:
- 1) The shares of that company should be listed on the Stock Exchange for at least 1 year or more.
- 2) It is mandatory to buy and sell the stock of that company on all the days on which the stock market is open within the last year.
- 3) These companies must be among the top 150 companies in the country in terms of average trade volume and value per day.
These are the elements that are taken into consideration by the index committee for listing.
Which of the top 30 Companies is Performing Better?
The 30 companies included in the Sensex were included for the first time in 1986. All these companies are financially strong and are also exceptionally large in terms of market cap. The demand for the shares of these companies always stays in the stock market.
Such companies are called “Blue Chip” companies. A total of 31 companies are currently included in the BSE i.e., the Bombay Stock Exchange’s Sensex, the list of companies listed in the BSE Sensex is as follows
1) Adani Ports
2) Asian Paints
3) Axis Bank Ltd.
4) Bajaj Auto Ltd.
5) Bharti Airtel Ltd.
6) Cipla
7) Coal India Ltd.
8) Dr Reddy’s Laboratories Ltd.
9) HDFC Bank Ltd
10) Hero MotoCorp Ltd.
11) Hindustan Unilever Ltd.
12) Housing Development Finance Corporation Ltd.
13) ICICI Bank Ltd.
14) ITC
15) Infosys Ltd.
16) Kotak Mahindra Bank Ltd.
17) Larsen & Toubro Ltd.
18) Lupine
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.
Currently, in a way, these companies rule the Indian market. All of these companies are major players in their respective industries, and each one represents its industry in some way on the Sensex.
Advantages of Sensex?
The biggest advantage of Sensex is that through this the investor can know and understand the future changes in the market and can invest his money properly according to them.
But we have some such benefits from Sensex, which do not have much effect or benefit directly but are especially useful indirectly. The movement of the rupee keeps changing according to the market and when the rupee is strong then things are cheaper in the country.
![SENSEX](https://gogst.in/wp-content/uploads/2022/12/20289170_6256878-1024x683.jpg)
Let us know about some of the different benefits.
1) When companies see the Sensex going up, investors also want to invest money in such companies, and when a lot of money is collected from investors, companies grow and expand. And whenever a company expands, it needs new people for that. In such a situation, they will give jobs to more people, which will directly lead to a reduction in unemployment.
2) When the stock market is good and the Sensex goes up, many foreign investors start coming to the country and when they invest in Indian companies, it will lead to a rise in the rupee. And the rupee strengthens against foreign currencies. And when the rupee gets stronger, it makes things cheaper. For example, salmon imported from abroad will be available at lower prices as compared to earlier due to the increase in the rupee.
The Indian stock market is constantly moving towards higher heights. At one time when it started in 1990, the Sensex used to be only one thousand, but in today’s time, this figure has reached a five-digit number, in today’s time it has crossed 30,000. and is creating new records each day.
We expect it to scale new heights in the future as well and help investors earn profits.
What is the oldest stock market index in the country?
The country’s oldest stock market index is BSE.
- When was BSE established?
BSE was established in 1957. - When was NSE established?
NSE was established in 1993. - What is the index of NSE?
NIFTY is the index of the National Stock Exchange {NSE}. - What is the index of BSE?
SENSEX is the index of the Bombay Stock Exchange {BSE}.
What did you learn today?
The share market can be a risky investment for you if you are ignorant of market behavior. Invest in the stock market very thoughtfully and get complete information before investing. Hope you have liked the Post related to Sensex.
I hope you guys have understood what is Sensex. I request all the readers you should also share this information with their neighbors, relatives, and friends so that there will be awareness among us and it will be beneficial for everyone. I need your cooperation so that I can convey more new information to you.
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