Full Form of SENSEX

Full Form of SENSEX – Stock Exchange Sensitive Index

The full form of SENSEX stands for Stock Exchange Sensitive Index. It can be defined as an index, which also means indicator, and it provides a general idea with respect to the movement of the maximum number of stocks that is, if they have gone up or down or in other words, it can also be understood as the index or indicator of all the companies listed on the Bombay stock exchange.

List of Companies Included in SENSEX

It can be defined as the weighted index of thirty companies. These thirty companies are chosen based on factors like overall financial well being and performance. Following are the names of the thirty companies that are included-

  • Lupin
  • Tata Steel Limited
  • Wipro Limited
  • Tata Motors Limited
  • State Bank of India
  • Sun Pharmaceutical Industry Limited
  • Tata Motors- DVR Ordinary
  • Tata Consultancy Services Limited
  • Kotak Mahindra Bank Limited
  • Mahindra and Mahindra Limited
  • Maruti Suzuki India Limited
  • Larsen and Toubro Limited
  • Reliance Industries Limited
  • NTPC Limited
  • Power Grid Corporation of India Limited
  • Oil and Natural Gas Corporation Limited
  • Viola
  • ITC Limited
  • Infosys Limited
  • ICICI Bank Limited
  • HDFC Bank Limited
  • Hindustan Unilever Limited
  • Hero MotorCorp Limited
  • Housing Development Finance Corporation Limited
  • Asian Paints Limited
  • Bajaj Auto Limited
  • Axis Bank Limited
  • Bharti Airtel Limited
  • Adani Ports and Special Economic Zone Limited
  • Coal India Limited
  • Reddys Laboratories Limited
Full-Form-of-SENSEX

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Purpose

It offers a broader view of the performance of stocks enlisted on the Bombay Stock Exchange. SENSEX is used to measure the ability of a particular stock to induce movements in an index. It is also used to evaluate and indicate the financial strength of the stock marketStock MarketStock Market works on the basic principle of matching supply and demand through an auction process where investors are willing to pay a certain amount for an asset, and they are willing to sell off something they have at a specific price.read more.

The primary purpose is it indicates the movement in the market. Stock Exchange Sensitive Index helps in the measurement of the performances of the trending top thirty stocks in the country based on liquidity and market cap.

How does it Work?

At SENSEX, all differential voting right sharesVoting Right SharesVoting Shares are the shares that authorize the shareholder to vote on Company issues like modifying its corporate policies or selecting Board of Directors etc. read more and common stocks that form a part of S&P BSE 100 qualifies for index inclusion. It offers the time series of data over a longer duration of time. The closing figure is calculated with the help of a weighted average with respect to all the trades on the Stock Exchange Sensitive Index constituents in the final fifteen minutes of a trading session.

If the Stock Exchange Sensitive Index constituent is not traded in the final fifteen minutes, then the last price that has been traded is considered for calculation of the closure of the index. And if the same is not traded for the entire day, then the closing price for the last day is considered for calculating the index closure.

How is it Calculated?

Benefits

Following are the benefits-

Benefits-of-SENSEX

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Conclusion

Stock Exchange Sensitive Index initially complied in the year 1986, and it is the country’s oldest stock market index. It acts as the pulse of the national stock markets. The calculation happens primarily by using the full market capitalization method.

From 1st September 2003, the calculation of SENSEX is done with the help of the free-float market capitalization method instead of the full market capitalization method. The free-float market capitalization method is considered as the best method of all, and this method is based on the fact that the level of indexes at all points reflects the free-float market values of thirty component stocks that are related to a base period.

Stock Exchange Sensitive Index is widely used in not just national markets but international markets too. Investors all over the world follow the Stock Exchange Sensitive Index closely to use it as a base for constructing investment related decisions.

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This article has been a guide to the Full Form of SENSEX and its definition. Here we learn the purpose, companies included, and working of stock exchange sensitive index along with benefits. You may refer to the following articles to learn more about finance –

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