Sensex, short for the S&P BSE Sensex (Sensitive Index), is India’s oldest and one of the most widely tracked stock market indices. Managed by the Bombay Stock Exchange (BSE), it represents the performance of the top 30 financially sound and well-established companies listed on the exchange. These companies are selected based on factors such as market capitalization, liquidity, and sector representation, making the Sensex a key indicator of India’s overall market health and economic trends.

The Sensex value is calculated using the free-float market capitalization method, which means it reflects only the shares available for public trading and excludes promoter holdings. This ensures a realistic view of how market participants perceive the economy and corporate performance. When the Sensex rises, it typically indicates growing investor confidence and a positive economic outlook. Conversely, a fall in the index may signal caution or negative sentiment among investors.

Several factors influence the movement of the Sensex, including corporate earnings, interest rates, government policies, inflation, and global market trends. It also responds to geopolitical events and foreign investment flows. For investors, tracking the Sensex helps in understanding market direction and making informed decisions about portfolio diversification or risk management.

As a benchmark index, the Sensex serves as a barometer for India’s economic growth and investor sentiment. It is often used to compare the performance of mutual funds, ETFs, and other investment portfolios. Whether you are a new or seasoned investor, keeping an eye on the Sensex can provide valuable insights into market movements and long-term investment opportunities, aligning with regulatory guidelines set by SEBI for responsible market participation.