Sensex has been a barometer of market sentiments and is considered a leading popular index for gauging the health of India’s stock markets. The Sensex index live is a barometer of investor confidence in benchmark stock indices. It is a measure of stock market performance. It is a price-weighted index of the Bombay Stock Exchange and National Stock Exchange, consisting of the 30 most actively traded stocks in the BSE. All indices are not based on the value of an individual stock in the index but on the value of the index. The BSE Sensex was first created in 1950 and is calculated in real-time. It is also the most important market indicator of the Indian economy because of the link between the two. It is a gauge of the overall strength of the Indian economy. The Sensex index is based on the value of a selected index in Mumbai and is calculated in real-time.
Some criteria a company needs to be considered for addition to SENSEX.
- Market Capitalization: The most important measure of the size of a company. It is the only one that gives an indication of how much a company is worth and is often used to compare the size of companies by their total market capitalization. Market capitalization is a measure of the market value calculated by multiplying the market price with the number of shares outstanding.
- Trading Frequency: Trading Frequency is an important factor that determines how much trading occurs in an individual stock. The more trading an individual stock does, the more in demand and expensive it is to buy and sell. The stock must be trading every day for the last 1 year.
- Average Daily Trades: The stock must be trading in the top 150 companies that are listed by the average number of trades per day for the last 1 year.
- Average Daily Turnover: The stock must be trading at the average value of shares per day among the Top 150 companies listed.
- Listed History: The history of a company, stock, or index can be seen when you compare the date the company was first listed, to the date on which it was last traded. It is a useful way of determining if the stock price is a buy or a sell. The company should have a listing history of at least 1 year in BSE.
How can you Invest in SENSEX?
- Buy stocks directly in the same percentage as weightage in SENSEX: The weightage of each stock is calculated by multiplying the number of shares owned by the total number of shares in SENSEX.
- Invest in Index Mutual Funds: The only way to invest in stock markets is to buy shares in index funds. This is a simple and direct way of investing in stock markets. Invest in mutual funds that invest in a particular index.
For a company to get into the Sensex index it should have a good track record of growth and profitability. The company should also have a good track record of increasing shareholder value over the long term, a good-sized and consistently growing customer base, a good competitive advantage in its industry, and a solid balance sheet along with good debt-to-equity and a stable cash flow. MARSHA and MMTC are the top gainers in NSE today.
