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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 –

1.  Each company’s Market capitalization is determined (No. of shares x price)

2. 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

3. 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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Category Shares & Stock, Other Articles by - CA Chiranjiv Kumar 



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