The Sensex is an index of 30 major companies trading on the Bombay Stock Exchange (BSE) in India. It is a market capitalization weighted index that is considered the benchmark for the Indian stock market and reflects its overall performance and movements. The Sensex components represent large, well-established companies across major sectors. The value of the Sensex is calculated based on the total market value of the component stocks, adjusted for float. It is one of the oldest stock market indices in India, providing a long time series of data since 1978.

1. Presented To
DR. RISHI RAMAN
SINGH
(Associate Professor)
Presented By
Devtosh Mishra
PG/24/093
SENSEX

2. • A stock market is a physical place, where
brokers gather to buy and sell stocks and
other securities. It is also known as a stock
exchange. A stock market enables the trading
• – buying and selling - of stocks. In some
places, stock markets (Not Stock Exchange)
still have a fixed location, but in the modern
internet and technological world which we now
live in, it can be anetwork of computers
enabling buying and selling of stocks at
agreed prices.
Stock Market

3. Introduction
• Sensex is an index, an index is basically an
indicator. It gives you a general idea about
whether most of the stock shave gone up
or most of the stocks have gone down. The
Sensex is an indicator of all the prices of
the major companies of the BSE( Bombey
stock exchange)

4. The SENSEX, short form of the BSE-
Sensitive Index, is a "Market Capitalization-
Weighted“ index of 30 stocks representing a
sample of large, well- established and
financially sound companies. It is the oldest
index in India and has gained a unique place
in the collective awareness of investors. The
index is widely used to measure the
performance of the Indian stock markets.
SENSEX is considered to be the pulse of the
Indian stock markets. As the oldest index of
the Indian Stock market, it offers time series
data over a fairly long period of time.
(since 1978-79).

5. HOW SENSEX IS CALCULATED-
Sensex is calculated using a “market-
capitalization weighted” methodology. As per this
methodology, the level of index at any point of time
reflect the total market value of 30 components
stock relative to a base period. (the market
capitalizationof a company is determined by
multiplying the price of its stock by the number of
shares issued by the company).
This market capitalization is again multiplied by
the free-float factor to determine the free- float
market capitalization

6. objectives OF SENSEX
The Sensex is the benchmark index of the Indian
Capital Markets with wide acceptance among individual investors,
institutional investors, foreign investors and fund managers. The
objectives of Sensex are following:
 Tomeasure market movements
 Benchmark for funds performance
 For index based derivative

7. A. TO MEASURE MARKET MOVEMENTS
Given its long history and its wide acceptance, no other index
matches the SENSEX in reflecting market movements and sentiments.
SENSEX is widely used to depict the mood in the Indian Stock markets.
B. BENCHMARK FOR FUNDS PERFORMANCE
The inclusion of blue chip companies and the broad and
balanced industry representation in the SENSEX makes it the ideal
benchmark for fund managers to compare the performance of their funds.
C.FOR INDEX BASED DERIVATIVE PRODUCTS
Institutional investors, money managers and small
investors all refer to the Sensex for their specific purposes The Sensex
is in effect the substitute for the Indian stock markets.
The country's first derivative product i.e. Index-Futures was launched on
SENSEX

8. GRAPH SHOWING THE
PERFORMANCE OF
SENSEX

9. NIFTY
Nifty is an indicator of all the
major companies of NSE. The Nifty index
is a composite of the top 50stocks listed
on the National stock exchange. It is a
simplified tool which helps investors &
ordinary people alike, understand what
happens in the stock market & by
extension, the economy.

10. BOMBAY STOCKEXCHANGE
 The BSE or Bombay stock exchange
sensitive Index is a value weighted
index. Composed of 30stocks with the
base April 1979=100.
 It consists of the 30largest and most
actively traded stocks, representative of
various sectors, on the BSE.
 These companies account for around
one fifth of the market capitalization of
the BSE.

11. Contd…
 The index has increased by over13 times from
June 1990 to today. using information from April
1979 onwards the long run rate of return on the
BSE sensex can be estimated to be 0.52%per
week (continuously compounded) with a
standard deviation of 3.67%.this translates to
27%per annum, which translate to roughly 18%
pa after compensating for inflation.

12. NATIONAL STOCK EXCHANGE
 The NSE of India limited was created on the
basis of the report of the high powered study
group on establishment of new stock
exchanger, which recommended promotion of
NSE by financial institution to provide access to
investors from all across the country on an
equal footing.
 In 1992, NSE was incorporated as a tax paying
company unlike other stock exchange in the
country.

13. Contd…
 The capital market (equities) segment commenced
operation Nov. 1994 and operations in derivatives
segment were started in June 2000.
 NSE launched s & p CNX NIFTY in April 1996.NSE is
one largest interactive VSAT based stock exchange
in the world. Presently it supports 3000 VSATS.
 In April 1993,NSE was recognized as a stock
exchange under the securities contract(regulation)
act,1956.

14. OBJECTIVE OF NSE
 Establishing nationwide trading facilities for all
types of securities .
 Ensuring equal access to investors all over the
country through an appropriate
telecommunication network.
 Providing fair , efficient & transparent
securities market using electronic trading
system.
 Meeting international benchmark and
standards.

15. MELT DOWN OF SHARE MARKET
 Inflation in India is high, this will make production
cost high and net profit down of companies .
 Unstable political condition –Left parties threatening
to withdraw support to the government and this
cause a re-election and instability due to nuclear
deal.
contd…

16. Contd…
 International fuel price-Increasing fuel price is
another reason for fall, this cause production cost
high for companies.
 Slow down US growth , due to this many US
investors withdraw their money from Indian market.

17. WHAT ARE THE TOPMOST COMPANIES IN SENSEX?
Top Five Sensex Stocks
Reliance Industries
Weight %
13.52
Infosys Technologies 9.74
ICICI Bank 7.20
Larsen and Toubro 7.13
HDFC Ltd 5.27

18. CONTD…
Top Five Sensex Sectors Weight % #
Finance 22.15
Oil and Gas 17.51
Information Technology 14.58
Capital Goods 10.28
FMCG 7.46