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SENSEX
Introduction
WHAT IS SENSEX?
SENSEX is the short term for the words "Sensitive Index" and is associated with the Bombay (Mumbai) Stock Exchange (BSE).
What is it?
The SENSEX was first formed on 1-1-1986 and used the market capitalization of the 30 most traded stocks of BSE. The base was 1979 and taken as 100. The 30 scripts of 1986 and no more the same - some have been removed while some have been added. At irregular intervals, the Bombay Stock Exchange (BSE) authorities review and modify its composition to make sure it reflects current market conditions. Sensex is calculated methodology. using the "Free-float Market Capitalization"
Holdings by founders/directors/ acquirers which has control element Holdings by persons/ bodies with "controlling interest" Government holding as promoter/acquirer Holdings through the FDI Route Strategic stakes by private corporate bodies/ individuals Equity held by associate/group companies (cross-holdings) Equity held by employee welfare trusts Locked-in shares and shares which would not be sold in the open market in normal course.
Sensex Calculation
1. 2. 3. 4. Find out the free float market cap of all the 30 companies that make Up the sensex! Add all the free float market caps of all the 30 companies! Make all this relative to the sensex base. The value you get is the sensex value!
To explain this further: Suppose that the sensex was made up of two companies, A and B. Company A, had 100 (free float) shares in the market in 1979 and the price of Rs. 10. Market cap= Rs. 1000 Company B, had 200 (free float) market in the market and the price of Rs.15. Market cap= Rs. 3000 So the Sensex had a total market cap of Rs. 4000 in 1979 and this is taken as index value = 100 Today company A has 1000 (free-float) shares and the current price is Rs. 150, while company B has 5000 (free-float) shares at Rs. 120. Hence market cap = Rs. 150,000 + Rs. 600,000 = Rs. 750,000. So the equation is: Market Cap of 4000 = Sensex value 100 Market cap of 750000=? Ans: Todays sensex value will be 18750
Any company in the filtered, sorted list created in Step 6 that has Cumulative Turnover of >98%, are excluded, so long as the remaining list has more than 30 scrips. The filtered list calculated in Step 7 is then sorted by free float market capitalization. Any company having a weight within this filtered constituent list of <0.50% shall be excluded. All remaining companies will be sorted on sector and sub-sorted in the descending order of rank on free-float market capitalization. Industry/Sector Representation: Scrip selection will generally attempt to maintain index sectoral weights that are broadly in-line with the overall market. Track Record: In the opinion of the BSE Index Committee, all companies included within the SENSEX should have an acceptable track record.
MSCI, a leading global index provider, shifted all its indices to the Free-float Methodology in 2002. The MSCI India Standard Index, which is followed by Foreign Institutional Investors (FIIs) to track Indian equities, is also based on the Free-float Methodology. NASDAQ-100, the underlying index to the famous Exchange Traded Fund (ETF) QQQ is based on the Free-float Methodology.
Sensex Falls
Some major single-day falls of the Sensex have occurred on the following dates January 21, 2008 --- 1,408.35 points Oct 24, 2008---1070.63 points March 17, 2008 --- 951.03 points July 6, 2009 --- 870 points January 22, 2008 --- 857 points February 11, 2008 --- 833.98 points May 18, 2006 --- 826 points October 10, 2008 --- 800.10 points March 13, 2008 --- 770.63 points December 17, 2007 --- 769.48 points January 7, 2009 --- 749.05 points March 31, 2007 --- 726.85 points October 6, 2008 --- 724.62 points October 17, 2007 --- 717.43 points September 15, 2008 --- 710.00 points January 18, 2007 --- 687.82 points November 21, 2007 --- 678.18 points August 16, 2007 --- 642.70 points August 17, 2009 --- 626.71 points June 27, 2008 --- 600.00 points November 12, 2010 --- 432 Points November 16, 2010 --- 444.55 Points
Code
Name
Sector
500410
ACC
500010
HDFC
0.90
5.21
500510
Capital Goods
0.90
6.85
532500
Maruti Suzuki
Transport Equipments
0.50
1.71
500900
Sterlite Industries
0.45
2.39
524715
0.40
1.03
532540
Information Technology
0.25
3.61
500400
Power
0.70
1.63
500325
Reliance Industries
0.50
12.94
Milestone of Sensex
1000, July 25, 1990 - On July 25, 1990, the Sensex touched the fourdigit figure for the first time and closed at 1,001 in the wake of a good monsoon and excellent corporate results. 2000, January 15, 1992 - On January 15, 1992, the Sensex crossed the 2,000-mark and closed at 2,020 followed by the liberal economic policy initiatives undertaken by the then finance minister and current Prime Minister Dr Manmohan Singh. 3000, February 29, 1992 - On February 29, 1992, the Sensex surged past the 3000 mark in the wake of the market-friendly Budget announced by Manmohan Singh. 4000, March 30, 1992 - On March 30, 1992, the Sensex crossed the 4,000-mark and closed at 4,091 on the expectations of a liberal export-import policy. It was then that the Harshad Mehta scam hit the markets and Sensex witnessed unabated selling. 5000, October 11, 1999 - On October 8, 1999, the Sensex crossed the 5,000-mark as the Bharatiya Janata Party-led coalition won the majority in the 13th Lok Sabha election. 6000, February 11, 2000 - On February 11, 2000, the information technology boom helped the Sensex to cross the 6,000-mark and hit and all time high of 6,006. 7000, June 21, 2005 - On June 20, 2005, the news of the settlement between the Ambani brothers boosted investor sentiments and the scrips of RIL, Reliance Energy, Reliance Capital and IPCL made huge gains. This helped the Sensex crossed 7,000 points for the first time. 8000, September 8, 2005 - On September 8, 2005, the Bombay Stock Exchange's benchmark 30-share index the Sensex - crossed the 8000 level following brisk buying by foreign and domestic funds in early trading. 9000, December 9, 2005 - The Sensex on November 28, 2005 crossed 9000 to touch 9000.32 points during mid-session at the Bombay Stock Exchange on the back of frantic buying spree by foreign institutional investors and well supported by local operators as well as retail investors. 10,000, February 7, 2006 - The Sensex on February 6, 2006 touched 10,003 points during mid-session. The Sensex finally closed above the 10,000-mark on February 7, 2006. 11,000, March 27, 2006 - The Sensex on March 21, 2006 crossed 11,000 and touched a peak of 11,001 points during mid-session at the Bombay Stock Exchange for the first time. However, it was on March 27, 2006 that the Sensex first closed at over 11,000 points. 12,000, April 20, 2006 - The Sensex on April 20, 2006 crossed 12,000 and touched a peak of 12,004 points during mid-session at the Bombay Stock Exchange for the first time.
13,000, October 30, 2006 - The Sensex on October 30, 2006 crossed 13,000 for the first time. It touched a peak of 13,039.36 and finally closed at 13,024.26. 14000, December 5, 2006 - The Sensex on December 5, 2006 crossed 14,000. 15,000, July 6, 2007 - The Sensex on July 6, 2007 crossed 15,000 mark. 16,000, September 19, 2007 - The Sensex on September 19, 2007 crossed the 16,000 mark. 17,000, September 26, 2007 - The Sensex on September 26, 2007 crossed the 17,000 mark for the first time. 18,000, October 9, 2007 - The Sensex on October 9, 2007 crossed the 18,000 mark for the first time. 19,000, October 15, 2007 - The Sensex on October 15, 2007 crossed the 19,000 mark for the first time. 20,000, October 29, 2007 - The Sensex on October 29, 2007 crossed the 20,000 mark for the first time. 21,000, Jan 08, 2008 - The Sensex on January 8, 2008 touched all time peak of 21078 before closing at 20873. November 5, 2010 - The Sensex on November 5, 2010 closes at 21,004.96 with highest peak in two years.
ACKNOWLEDGEMENT
We the students of SHRI CHINAI COLLEGE OF COMMERCE AND ECONOMICS from S.Y.B.COM (ACCOUNTING & FINANCE), Have a great pleasure in presenting a complete PROJECT on Sensex very satisfactory and appreciable manner. Our efforts have been a success with due co-operation of our group, teachers & guides without which a project of such magnitude would not have been possible within the given time. We would like to thank our respected project guide PROF. Hasan for his guidance and support throughout project. In all it was a united effort which made this project a successful one.
Index
1. Introduction 2. What is free float market Capitalization? 3. How is sensex calculated? 4. Sensex Calculation 5. Scrip selection criteria 6. Major advantages of Free-float Methodology 7. Sensex Falls 8. Companies Listed in Sensex 9. Milestone of Sensex
Biblography
Websites
1. www.google.com 2. www.moneycontrol.com 3. www.wikipedia.com 4. www.googleimages.com