In this article, we will discuss
- What is Sensex?
- Historical Performance of Sensex
- Why You Should Invest in Sensex
- Cons of Investing in Sensex
- Comparison of Sensex with Other Stock Market Index
- Some of the advantages of BSE Sensex over other indices are:
- Expert Opinions on Sensex Investing
- Factors to Consider Before Investing in Sensex
- How to Invest in Sensex
What is Sensex?Sensex is the most popular stock market index in the Indian Stock Market. It is one of the earliest Indian benchmarks. It consists of 30 chosen stocks from businesses traded on India's Bombay Stock Exchange (BSE). These 30 stocks are from some of the biggest companies and are the most commonly traded stocks. Sensex was started in 1986, and S&P runs it. The calculation is performed in both Indian rupees and U.S. dollars. It is market capitalization-weighted and float-adjusted. This indicator is an important aspect of the Indian economy. The Sensex today live is at 58955.53 as of March 31, 2023, at 03.15 IST, up 1.72%.
Historical Performance of SensexThe Sensex tracks the performance of 30 major companies listed on the BSE based on their liquidity, trading volume and industry representation. It is a free-float market capitalization-weighted index with a base value of 100 as of 1978-79.The Sensex has witnessed many ups and downs since its inception, reflecting the changes in the Indian economy and the global markets. It has undergone several phases of bull and bear markets, recessions and crashes, and booms and busts. The table below shows the closing value of the Sensex for the last 5 years:
Why You Should Invest in SensexInvesting in Sensex, which is the benchmark index of the Bombay Stock Exchange (BSE), can have several potential benefits, including
Diversification and Exposure
Stable Investment Option
Cons of Investing in Sensex
Affected by Global Events and Political Instability
Comparison of Sensex Today Live with Other Stock Market Index
|Index||Number of stocks||Exchange||Base year||Base value||Sectoral representation||Investment Opportunity|
|Sensex||30||BSE||1978-79||100||Diversified across 12 sectors||High|
|Nifty 50||50||NSE||1995-96||1000||Diversified across 13 sectors||High|
|BSE Midcap||101||BSE||2002-03||1000||Diversified across 18 sectors||Moderate|
|Nifty Midcap 100||100||NSE||2003-04||1000||Diversified across 17 sectors||Moderate|
|BSE Smallcap||751||BSE||2002-03||1000||Diversified across 23 sectors||Low|
|Nifty Smallcap 100||100||NSE||2004-05||1000||Diversified across 16 sectors||Low|
Some of the advantages of BSE Sensex over other indices are:
- Sensex is India's oldest and most widely followed index, with high credibility and recognition among investors and media.
- Sensex comprises India's largest and most liquid companies, with a profitability and governance track record.
- Sensex has a low turnover rate, meaning its constituents do not change frequently. This reduces the impact of market noise and speculation on Sensex's performance.
- Sensex today live is highly correlated with other global indices, such as the S&P 500 and the MSCI Emerging Markets Index. Sensex is a good proxy for the Indian economy and its integration with the world economy.
Expert Opinions on Sensex Investing
- Berger Paints CEO Abhijit Roy predicts almost double-digit growth in Q4 and sees no need to lower prices in the Indian market.
- Dinesh Kumar Khara, Chairman of the State Bank of India, anticipates 14-16% credit growth and NIM expansion in FY24 due to strong demand in the retail and corporate sectors, government infrastructure commitments, and interest rate stabilization.
- Mahesh Nandurkar is optimistic about industrials, real estate, and banks, showing signs of investment-driven growth.
Factors to Consider Before Investing in SensexBefore investing in Sensex, it is important to consider several factors. Here are some key factors that you should consider:
- Investment objective and risk profile: Sensex investing suits investors with a long-term horizon and moderate risk tolerance. Sensex can provide steady and consistent returns over time but also experience volatility and downturns due to various factors. You should invest in NSE Sensex only if it aligns with your financial goals and risk appetite.
- Diversification strategy: Sensex investing can provide exposure to the Indian economy and its integration with the global economy. It can also expose you to the risks and challenges of the Indian market. You should diversify your portfolio across different sectors, geographies and asset classes to reduce risk and enhance returns.
- Costs and fees: Sensex investing involves various costs and fees, such as brokerage charges, transaction charges, securities transaction tax (STT), stamp duty, GST and fund management fees. These costs and fees can eat into your returns and affect your net profit. Before investing in Sensex, you should compare the costs and fees of different brokers and fund houses.
- Fund selection: There are various funds to invest in NSE Sensex, like ETFs, Index funds. These funds offer low-cost, passive and diversified exposure to the Sensex without requiring you to research or buy individual stocks. However, these funds can also have different features, such as tracking error, dividend policy, taxation, liquidity and availability. You should choose the fund that best suits your needs and preferences.
How to Invest in SensexYou have several ways to invest in Sensex. Here are some ways to invest in Sensex:1. Directly investing in Sensex stocks - You can buy stocks of companies that are a part of Sensex. The BSE Sensex index comprises 30 stocks, and you can invest in these stocks through a stockbroker or an online trading platform.2. Exchange-traded funds (ETFs) - You can invest in NSE Sensex through ETFs, which track the Sensex index's performance. ETFs can be bought and sold on stock exchanges, offering investors the benefit of diversification.
|Value (in Rs. Lakhs)|
|ICICI Prudential S&P BSE Sensex ETF|
|HDFC SENSEX ETF||633.00|
|UTI S&P BSE Sensex ETF|
|LIC MF EXCHANGE TRADED FUND - SENSEX||628.41|