Apr 15, 2024
BSE SENSEX at 75,000
What is BSE Sensex?
The BSE Sensex, also known as the S&P Bombay Stock Exchange Sensitive Index, is a market index comprising 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE). These companies are among the largest and most actively traded on the BSE, representing various industrial sectors to provide a gauge of the Indian stock market’s overall performance.
When was it introduced?
The Sensex was introduced on January 1, 1986. It was created to offer a clear and easily understandable measure of the market’s performance over time, using a base year of 1978-79.
Why was it introduced?
The Sensex was introduced to provide a reliable indicator for the market to the investors, reflecting the overall market conditions. It aimed to offer a quick and efficient way to track the performance of the Indian stock market and the economy’s health through the lens of the selected 30 companies.
Factors Behind Growth to 75,000
The growth of the Sensex to 75,000 points can be attributed to several factors:
1. Economic Growth: India’s robust economic growth over the years has been a crucial factor, with GDP growth reflecting positively in corporate earnings.
2. Foreign Investments: Increased foreign direct investment (FDI) and portfolio investments from global investors have significantly contributed to the market’s buoyancy.
3. Policy Reforms: Various economic reforms, including liberalization, privatization, and globalization policies, have improved business sentiment and stock market performance.
4. Technological Advancements: The IT and services sector’s boom, where many of the Sensex-listed companies operate, has notably contributed to its growth.
5. Market Liquidity: Enhanced market liquidity, facilitated by both domestic and international investors, has supported the stock market’s upward trajectory.
6. Strong Corporate Earnings: The companies listed on the Sensex have generally shown strong earnings growth, reflecting the overall health of the corporate sector.
Global Indices
Global indices, similar to the BSE Sensex, serve as barometers for the stock market performance in different countries and regions. Notable examples include:
• Dow Jones Industrial Average (DJIA): Represents 30 significant stocks traded on the New York Stock Exchange (NYSE) and the NASDAQ.
• NASDAQ Composite: An index of more than 2,500 stocks of both domestic and international technology and biotech companies listed on the NASDAQ stock market.
• S&P 500: A market-capitalization-weighted index of 500 of the largest publicly traded companies in the U.S.
• FTSE 100: An index of the 100 companies listed on the London Stock Exchange with the highest market capitalization.
• Nikkei 225: The leading index for the Tokyo Stock Exchange, representing the top 225 blue-chip companies in Japan.
These indices, like the Sensex, offer insights into the economic and corporate health of their respective markets and are watched closely by investors worldwide.
SRIRAM’s
