How the sensex works?
Answer:
I think shares of 30 companies are traded on all working days on the Bombay Sensitive Index or Sensex.
What?
SENSEX WORKS ON THE BASIS OF COMPANY SHARES, LISTED WITH STOCK EXCHANGE,TRADED ON A PARTICULAR DAY. MANY CITIES IN INDIA HAVE THEIR OWN STOCK EXCHANGE. IN INDIA BOMBAY STOCK EXCHANGE (BSE) IS THE MAIN STOCK EXCHANGE WHERE MAJOR SHARES ARE REGISTERED AND TRADED EVERY DAY. ANOTHER, MAJOR STOCK EXCHANGE IS NATIONAL STOCK EXCHANGE (NSE). THESE TWO ARE DAILY QUOTED DAILY IN MAJOR NEWS PAPERS AND TV NEWS CHANNELS.
SENSEX, first compiled in 1986 was calculated on a "Market Capitalization-Weighted" methodology of 30 component stocks representing a sample of large, well-established and financially sound companies.
The base year of SENSEX is 1978-79. The index is widely reported in both domestic and international markets through print as well as electronic media. SENSEX is not only scientifically designed but also based on globally accepted construction and review methodology.
From September 2003, the SENSEX is calculated on a free-float marke capitalization methodology. The "free-float Market Capitalization-Weighted" methodology is a widely followed index construction methodology on which majority of global equity benchmarks are based.
The growth of equity markets in India has been phenomenal in the decade gone by. Right from early nineties the stock market witnessed heightened activity in terms of various bull and bear runs. More recently, the bourses in India witnessed a similar frenzy in the 'TMT' sectors. The SENSEX captured all these happenings in the most judicial manner. One can identify the booms and bust of the Indian equity market through SENSEX
The BSE 30 share index components are
SENSEX Constituents: 4-Oct-06
Name Sector
ACC Ltd. Housing Related
Bajaj Auto Ltd. Transport Equipments
Bharat Heavy Electricals Ltd. Capital Goods
Bharti Airtel Ltd. Telecom
Cipla Ltd. Healthcare
Dr Reddy's Laboratories Ltd. Healthcare
Grasim Industries Ltd. Diversified
Gujarat Ambuja Cements Ltd. Housing Related
HDFC Finance
HDFC Bank Ltd. Finance
Hero Honda Motors Ltd. Transport Equipments
Hindalco Industries Ltd. Metal,Metal Products & Mining
Hindustan Lever Ltd. FMCG
ICICI Bank Ltd. Finance
Infosys Technologies Ltd. Information Technology
ITC Ltd. FMCG
Larsen & Toubro Limited Capital Goods
Maruti Udyog Ltd. Transport Equipments
NTPC Ltd. Power
ONGC Ltd. Oil & Gas
Ranbaxy Laboratories Ltd. Healthcare
Reliance Communications Limited Telecom
Reliance Energy Ltd. Power
Reliance Industries Ltd. Oil & Gas
Satyam Computer Services Ltd. Information Technology
State Bank of India Finance
Tata Consultancy Services Limited Information Technology
Tata Motors Ltd. Transport Equipments
Tata Steel Ltd. Metal,Metal Products & Mining
Wipro Ltd. Information Technology
You can read more about the SENSEX at http://www.bseindia.com
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