Which Stocks Constitute the BSE Sensex?

The name S&P BSE Sensex stands for the S&P Bombay Stock Exchange Sensitive Index. It is also called the BSE 30 or simply the Sensex.

It is one of the most popular indices and is considered as the barometer of the Indian stock market. 

BSE Sensex is a free-float, market-weighted stock market index of the 30 companies that have the highest market capitalisation.

Instead of taking the total market capitalisation, the exchange has adopted the free-float market capitalisation, meaning that the promoter/ directors holdings are deducted from the total equity shares to arrive at the number of shares that are freely available for trading. Such number of free-floating equity shares, multiplied by the share price yields the free-float market capitalisation.

Constituents:

It goes without saying that the above composition will undergo changes from time to time as the fortunes of the constituents change and the market capitalisation may rise and fall, resulting in the induction of new constituents and corresponding drop of a few candidates.

To conclude, 30 companies having the highest market capitalisation constitute the S&P BSE Sensex.

BSE Sensex Index Slide

S&P BSE Sensex

Index Definition

Meaning/ Definition:

An Index is a reference number, derived from the prices of a basket of constituents like commodities, currencies and stocks. The individual members are given weights depending on their relative importance. The final result is brought down to a base number of 100 and launched for use on a particular date, which becomes the birthday for that index. From that day onwards the index undergoes changes on account of changes in the prices of the individual constituents.

An index serves as a sample or quick indicator based on which users can draw a meaningful conclusion about the overall population.

Index – Example:

The most popular stock index in India, the ‘BSE Sensex’ comprises of 30 stocks that have the highest market capitalisation. Published since January 1, 1986, the Sensex is regarded as the pulse of the domestic stock markets in India. The base value of the Sensex is taken as 100 on April 1, 1979, and its base year as 1978-79.