SENSEX- an indicator of market movement

SENSEX is a term used to depict the sensitivity of the stock market in India. The term SENSEX is an abbreviation for sensitivity index. It is the pulse of the stock market whose measurement can narrate the entire story of the companies who have listed their stocks in the stock market. BSE SENSEX is an index that acts as an indicator of Bombay Stock Exchange, which tells you the story of the stocks being traded in the market.

Initially the methodology used in calculation of SENSEX was ‘Market capitalization-Weighted’. This method was used firstly in 1986 when BSE- SENSEX was calculated for the first time in the history of stock market. BSE consist of 30 companies and this is the reason why it is also called as BSE-30. These 30 companies were of sound nature which were well reputed and were performing well terms of market share and sales.

Later on, in 2003 a new methodology for calculation of SENSEX was brought into use which was termed as free-float market capitalization. The SENSEX is calculated daily during the working days of stock market i.e. from Monday to Friday. The pulses of all the brokers and shareholders dance to the rhythms of market movements recorded as per SENSEX. The upward movement of SENSEX is termed as BULL which is an indicator of market growth while BEAR is the term associated with downward movement of the market thus indicating dwindling of the SENSEX.

For further Query regarding the calculation of SENSEX please feel free to visit http://bizcovering.com/investing/calculating-sensex/