How is sensex index calculated ?
SENSEX, first compiled in 1986 was calculated on a “Market Capitalization-Weighted” methodology of 30 component stocks representing a sample of large, well-established and financially sound companies.These companies account for around one-fifth of the market capitalization of the BSE(indices). The base year of SENSEX is 1978-79(April.1 1979 = 100). The index is widely reported in both domestic and international markets through print as well as electronic media. SENSEX is not only scientifically designed but also based on globally accepted construction and review methodology. From September 2003, the SENSEX is calculated on a free-float marke capitalization methodology. The “free-float Market Capitalization-Weighted” methodology is a widely followed index construction methodology on which majority of global equity benchmarks are based. Market cap or market capitalization is simply the worth of a company in terms of it’s shares! To put it in a simple way, if you were to buy all the share
