Sensex India

The Sensex (Sensitive Index), India’s benchmark index, was first compiled in 1986. The base period of Sensex is 1978-79 and the base value is 100 index points. This is often indicated by the notation 1978-79=100. The Sensex (Sensitive Index), India’s benchmark index, was first compiled in 1986. The base period of Sensex is 1978-79 and the base value is 100 index points. This is often indicated by the notation 1978-79=100. The calculation of Sensex involves dividing the free-float market capitalization of 30 companies in the Index by a number called the Index Divisor. The Divisor is the only link to the original base period value of the Sensex. It keeps the Index comparable over time and is the adjustment point for all Index adjustments arising out of corporate actions, replacement of scrips etc. During market hours, prices of the index scrips, at which latest trades are executed, are used by the trading system to calculate Sensex on a continuous basis using the free-float methodology. Free-float Methodology refers to an index construction methodology that takes into consideration only the free-float market capitalization of a company for the purpose of index calculation and assigning weight to stocks in the Index. Free-float market capitalization is defined as that proportion of total shares issued by the company that are readily available for trading in the market. A Free-float index reflects the market trends more rationally as it takes into consideration only those shares that are available for trading in the market. The BSE Index Cell does a real-time maintenance of the Sensex. The BSE Index Cell comprises of a committee of capital market expert, fund managers, market participants and members of the BSE Governing Board.

Sensex = Free-float market cap (total 30 companies) Divisor (divisor is frozen unless there is an in-out of scrips or a rights issue)