Sensex
Full form: Sensitive Index
The Sensex is the main stock market index of the BSE (Bombay Stock Exchange). It follows 30 large, well-established companies and is India's oldest stock index, often quoted alongside the Nifty 50 to show how the market is doing.
What the Sensex is
The Sensex was launched in 1986 and tracks 30 large companies listed on the BSE, chosen to represent major sectors of the economy. Like any index, it is a single number that summarises their combined movement. It is a measure, not a price you pay.
How it is weighted
The Sensex uses free-float market capitalisation, so companies with more shares available to the public carry more weight. The list is reviewed regularly, and companies can be added or removed.
Sensex and Nifty 50
The Sensex follows 30 companies on the BSE, and the Nifty 50 follows 50 on the NSE. Because both follow India's largest companies, they usually move in the same direction on most days, even though their numbers are different.
How people invest in it
You cannot buy the index itself. Index funds and ETFs that track the Sensex give you a small share of all 30 companies in one purchase.
Reading an index move (hypothetical numbers)
Suppose the Sensex closes at 80,000 one day and at 79,200 the next. It fell by 800 points, which is 1%.
That tells you the 30 companies moved down by about 1% overall that day, not that every one of them fell.
Common questions
- What is the full form of Sensex?
- Sensitive Index.
- Is the Sensex the same as the BSE?
- No. The BSE is the exchange. The Sensex is an index calculated from 30 companies listed on it.
- How many companies are in the Sensex?
- 30.
- What is the difference between Sensex and Nifty?
- The Sensex follows 30 companies on the BSE. The Nifty 50 follows 50 companies on the NSE. Both are measures of the broad Indian market.