Tuesday, April 7, 2009

Sensex – Basic Knowledge

Stock market has become an important part of several people. A robust stock market is indicative of a country’s rising wealth. Sky-rocketing stock exchange symbolizes power and growth of an economy. From India’s point of view Bombay Stock Exchange is the barometer of our financial health and performance indicator of hundreds of companies listed over there. Also known as Sensex, it has witnessed a topsy-turvy ride in last one year after 4-5 years of uninterrupted rise.

There are few not so known facts about Sensex. Let’s take a look at few of those interesting facts. However, to begin with Sensex is nothing but an abbreviated version of The Bombay Stock Exchange Sensitive Index. Sensex along with Nifty is most renowned terms in popular stock market. Nifty denotes National Stock Exchange whereas Sensex is the standard benchmark index of Indian stock market. Nifty is also known as S&P CNX Nifty in official terms. Nifty comprises of top 50 stocks whereas Sensex is comprised of 30 stocks.

Stocks represented in Sensex and Nifty belongs to diverse sectors and all of them are shining lights of their respective industries. Index committee also known as stock selection committee chooses these stocks based on market capitalization and industry standing. However there are few basic conditions to be fulfilled before getting picked in the index. One of them is chosen company must be among the top 150 companies in terms of trade number. Trade number signifies both number of shares sold and purchased apart from average value of trade. This data is considered over a period of one year.