Have you ever wondered what the SENSEX and NIFTY is? How are they calculated?
SENSEX i.e. Sensitive Index is the benchmark index of Bombay Stock Exchange (BSE) composed of 30 of the largest and most actively-traded stocks of BSE.
Calculation Method
BSE uses Free-Float methodology (multiplying the number of shares of top 30 companies with their respective equity’s price excluding locked in shares i.e. the ones hold by promoters, government and those having controlling interest in the concern) to calculate the index. For e.g. A company has 2 promoters X and Y and shares held by them are 1000 and 2000 respectively and to take a loan 1500 shares has been issued to government as a collateral. So 1000+2000+1500=4500 shares will be taken as locked in securities and all other shares are used to calculate SENSEX. Now question arises what is the process. Here it is –
- Each company’s Market capitalization is determined (No. of shares x price)
- Free float factor of company is determined by BSE. Free float factor (between 0.05-1.00) is a multiple by which company’s Market capitalization is multiplied to arrive at Free-float market capitalization. The factor is determined by details submitted by company. It is a kind of weightage given to companies. Say Capitalization is 36,00,000
- Now Ratio and Proportion is used. How? Base index of 1978-79 is used. Index of 1978-79 is taken as 100. Say the Free-float market capitalization was 60,000 (may vary) at the time.
When the capitalization was 60,000 index was 100
When the capitalization is 36,00,000 index is 6000
So it means SENSEX is 6000
INDEX AS OF 20th SEPTEMBER 2013
| Company Name | Company Name | Company Name |
| Bajaj Auto Ltd | Hindustan Unilever Ltd | Oil and Natural Gas Corporation Ltd |
| Bharat Heavy Electricals Ltd | Housing Development Finance Corporation Ltd | Reliance Industries Ltd |
| Bharti Airtel Ltd | ICICI Bank Ltd | Sesa Goa Ltd |
| Cipla Ltd | Infosys Ltd | State Bank of India |
| Coal India Ltd | ITC Ltd | Sun Pharmaceutical Industries Ltd |
| Dr.Reddy's Laboratories Ltd | Jindal Steel And Power Ltd | Tata Consultancy Services Ltd |
| GAIL (India) Ltd | Larsen & Toubro Ltd | Tata Motors Ltd |
| HDFC Bank Ltd | Mahindra and Mahindra Ltd | Tata Power Company Ltd |
| Hero MotoCorp Ltd | Maruti Suzuki India Ltd | Tata Steel Ltd |
| Hindalco Industries Ltd | NTPC Ltd | Wipro Ltd |
NIFTY i.e. National Stock Exchange Fifty is the benchmark index of National Stock Exchange (NSE) composed of 50 from of the largest and most actively-traded stocks of NSE. 50 Top stock are selected from 24 Sectors.
Calculation Method is just like BSE except the Base value is taken of year 1995 and is set to 1000 and base capital of Rs. 2.06 trillion is taken.
INDEX AS OF 20th SEPTEMBER 2013
| Company Name | Industry | Symbol |
| ACC Ltd. | CEMENT AND CEMENT PRODUCTS | ACC |
| Ambuja Cements Ltd. | CEMENT AND CEMENT PRODUCTS | AMBUJACEM |
| Asian Paints Ltd. | PAINTS | ASIANPAINT |
| Axis Bank Ltd. | BANKS | AXISBANK |
| Bajaj Auto Ltd. | AUTOMOBILES - 2 AND 3 WHEELERS | BAJAJ-AUTO |
| Bank of Baroda | BANKS | BANKBARODA |
| Bharat Heavy Electricals Ltd. | ELECTRICAL EQUIPMENT | BHEL |
| Bharat Petroleum Corporation Ltd. | REFINERIES | BPCL |
| Bharti Airtel Ltd. | TELECOMMUNICATION - SERVICES | BHARTIARTL |
| Cairn India Ltd. | OIL EXPLORATION/PRODUCTION | CAIRN |
| Cipla Ltd. | PHARMACEUTICALS | CIPLA |
| Coal India Ltd. | MINING | COALINDIA |
| DLF Ltd. | CONSTRUCTION | DLF |
| Dr. Reddy's Laboratories Ltd. | PHARMACEUTICALS | DRREDDY |
| GAIL (India) Ltd. | GAS | GAIL |
| Grasim Industries Ltd. | CEMENT AND CEMENT PRODUCTS | GRASIM |
| HCL Technologies Ltd. | COMPUTERS - SOFTWARE | HCLTECH |
| HDFC Bank Ltd. | BANKS | HDFCBANK |
| Hero MotoCorp Ltd. | AUTOMOBILES - 2 AND 3 WHEELERS | HEROMOTOCO |
| Hindalco Industries Ltd. | ALUMINIUM | HINDALCO |
| Hindustan Unilever Ltd. | DIVERSIFIED | HINDUNILVR |
| Housing Development Finance Corporation Ltd. | FINANCE - HOUSING | HDFC |
| I T C Ltd. | CIGARETTES | ITC |
| ICICI Bank Ltd. | BANKS | ICICIBANK |
| IDFC Ltd. | FINANCIAL INSTITUTION | IDFC |
| IndusInd Bank Ltd. | BANKS | INDUSINDBK |
| Infosys Ltd. | COMPUTERS - SOFTWARE | INFY |
| Jaiprakash Associates Ltd. | CONSTRUCTION | JPASSOCIAT |
| Jindal Steel & Power Ltd. | STEEL AND STEEL PRODUCTS | JINDALSTEL |
| Kotak Mahindra Bank Ltd. | BANKS | KOTAKBANK |
| Larsen & Toubro Ltd. | ENGINEERING | LT |
| Lupin Ltd. | PHARMACEUTICALS | LUPIN |
| Mahindra & Mahindra Ltd. | AUTOMOBILES - 4 WHEELERS | M&M |
| Maruti Suzuki India Ltd. | AUTOMOBILES - 4 WHEELERS | MARUTI |
| NMDC Ltd. | MINING | NMDC |
| NTPC Ltd. | POWER | NTPC |
| Oil & Natural Gas Corporation Ltd. | OIL EXPLORATION/PRODUCTION | ONGC |
| Power Grid Corporation of India Ltd. | POWER | POWERGRID |
| Punjab National Bank | BANKS | PNB |
| Ranbaxy Laboratories Ltd. | PHARMACEUTICALS | RANBAXY |
| Reliance Industries Ltd. | REFINERIES | RELIANCE |
| Reliance Infrastructure Ltd. | POWER | RELINFRA |
| Sesa Goa Ltd. | MINING | SESAGOA |
| State Bank of India | BANKS | SBIN |
| Sun Pharmaceutical Industries Ltd. | PHARMACEUTICALS | SUNPHARMA |
| Tata Consultancy Services Ltd. | COMPUTERS - SOFTWARE | TCS |
| Tata Motors Ltd. | AUTOMOBILES - 4 WHEELERS | TATAMOTORS |
| Tata Power Co. Ltd. | POWER | TATAPOWER |
| Tata Steel Ltd. | STEEL AND STEEL PRODUCTS | TATASTEEL |
| UltraTech Cement Ltd. | CEMENT AND CEMENT PRODUCTS | ULTRACEMCO |
Chiranjiv Kumar
Owner of FundsPedia.com
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so informative
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