An index is used to capture the overall sentiments of any markets. In India, out of 17 approved exchanges for equities and commodities. BSE is the oldest and the most active exchange in India with a barometer called The Sensex.
SENSEX Full Form
The full form of Sensex is ‘ Sensitive Index’.
It is the barometer of BSE which has a free-float stock market index of 30 well-established, diversified and financially sound companies listed on The Bombay Stock Exchange.
The SENSEX was introduced on 1st January 1986, by The Bombay Stock Exchange.
There are 5000+ companies listed on BSE, but to calculate SENSEX only thirty well-established, economically strong companies are selected based on the highest traded stocks that represent the various sectors in India.
Established in 1986, SENSEX touched the four-digit figure on 25 July 1990 and the five-digit figure on 7 February 2006, for the first time.
On 4 March 2015, it crossed 30,000 points.
(Suggested reading: How is Sensex Calculated?)
List of 30 companies in SENSEX
|Sr No.||Security Code||Security Name||LTP|
(Note: This list is updated on 1st January 2021)
History and Milestones of BSE Sensex
|9th Jul 1875||The Native Share & Stock Broker’s Association was formed|
|2nd Jan 1986||S&P BSE SENSEX, the country’s first equity index was launched|
|25th Jul 1990||S&P BSE SENSEX closes above 1,000 points|
|15th Jan 1992||S&P BSE SENSEX closes above 2,000 points|
|30th Mar 1992||S&P BSE SENSEX closes above 4,000 points|
|14th Mar 1995||BSE On-Line Trading (BOLT) system introduced in India|
|19th Aug 1996||First major BSE SENSEX revamp|
|1997||BSE On-Line Trading (BOLT) system expanded in India|
|11th Oct 1999||S&P BSE SENSEX closed above 5,000 points|
|11th Feb 2000||S&P BSE SENSEX crosses 6,000 points in intra-day|
|9th Jun 2000||Equity Derivatives introduced in India|
|1st Jun 2001||Index Options launched in India|
|1st Sep 2003||S&P BSE SENSEX shifted to the free float methodology|
|2nd Jun 2004||S&P BSE SENSEX closes over 6,000 points for the first time|
|17th May 2004||Second biggest fall of all time!
Circuit used twice in a day (564.71 points, 11.14%)
|8th Aug 2005||Incorporation of Bombay Stock Exchange Ltd.|
|7th Feb 2006||S&P BSE SENSEX closed above 10,000 points|
|7th Mar 2007||Singapore Exchange Limited invested in a 5% stake in BSE|
|10th Jan 2008||S&P BSE SENSEX records an all-time high of 21206.77|
|18th May 2009||The S&P BSE SENSEX raised 2110.70 points (17.34%) and the
upper circuit breaker was applied
|4th Jan 2010||Market time changed to 9.00 am – 3.30 pm|
|21st Sep 2010||First to introduce Mobile Trading|
|13th Oct 2015||BSE becomes the fastest exchange in the world with the speed of 6 microseconds|
|3rd February 2017||BSE to become India’s 1st listed Stock Exchange|
|23rd March 2017||BSE crosses Rs.200,111 Crore via the Debt online platforms|
|1st October 2018||BSE launches its commodity derivatives segment.|
Significance of Sensex
A stock market index like BSE Sensex helps the investors to discover the situation of the market.
Let us understand why the stock market index is necessary for investors.
1. Guides the Investors to Pick The Right Stocks
In BSE more than 5000 companies are listed and it is a tedious task to discover the right stock to invest in.
Without a benchmark index, it is very difficult to differentiate between two stocks and make the right decision.
The BSE Sensex classifies the shares of companies based on industry type, size, financial impact, etc.
So, BSE Sensex turns out to be a guide for investors.
2. Convenient Indicator for Beginners
Equity investing can be high risk especially for beginners who have just started to trade.
The stock market index like BSE Sensex bridges the gap between beginners and experienced investors with a simple depiction of trends in the market.
So, even a beginner can analyse and trade with ease with the help of BSE Sensex.
3. Reflects Sentiments of Investors
Another major reason BSE Sensex is preferred is that they summarise the daily sentiments of investors trading on them.
For example, during times of political imbalances, certain stocks underperform, this indicates that the investors are uncertain or nervous about new reforms in the economy.
Understanding these sentiments shows investors whether a trend is short-term or is going to last.
How to trade in companies listed on BSE Sensex?
Since you now understand the full form of Sensex and the 30 companies of Sensex and the significance of BSE Sensex.
Let us now understand the step-by-step procedure to trade in companies listed on BSE Sensex.
- Firstly, open a trading and Demat account. Fortunately, you don’t have to look far, as Samco has been awarded as the best equity stock broker in India by CNBC – Awaaz!
- Once your Demat account is opened, you simply need to transfer funds from your bank account to your trading account and start trading on NSE or BSE!
So, open the best Demat and Trading account in India with Samco today and start creating infinite wealth in the stock markets!
Don’t forget to read the Difference Between the Benchmark Indexes NIFTY and SENSEX!