With the economy affected so much due to the pandemic, many people have founded ways of investing in the markets. People have bought shares and IPOs to overcome their losses and have entered the stock market with an intent to cover their losses and as much profit as possible. The Sensex which is set by the Bombay Stock Exchange is something you need to follow if you have entered the stock market as well. it is important to keep yourself updated with the daily news and the news of Sensex and nifty.

So, what is Sensex?

Sensex is a market index that is globally accepted and comes under the Bombay Stock Exchange. It is run by the BSE. 30 companies are under it and these companies are large and liquid. The price of the index keeps on getting updated every day and you need to keep up with it continuously. If the Sensex index moves up then, it implies that the costs of the majority of the stocks on the file have moved higher. The prices keep on fluctuating and it isn’t stable all the time. Then again, if Sensex drops down, it infers most of the list organizations have not performed well on that specific exchanging day.

The Sensex is calculated in a systematic way that has been set by the BSE and monitored as well. Sensex is determined by counting the stock costs of 30 large and liquid organizations recorded on BSE. It is determined by utilizing the “free-float market capitalization” strategy. This is probably the best strategy for ascertaining a stock market index. In the prior years, Sensex would be determined utilizing the weighted market capitalization technique. Notwithstanding, from September first, 2003 onwards the free-float market capitalization technique is being used. To have an accurate index that is usually always stable, Sensex keeps on changing the top 30 companies which are under it depending upon the different financial ratios.

There is a particular way of calculating the Sensex, set by the BSE. The formula for calculating Sensex goes as follows:

Value of Sensex = (Total free float market capitalization/ Base market capitalization)

 The base period index value is considered here. The base period (year) for Sensex calculation is 1978-79. The base value index is 100. One can easily calculate the amount of BSE Sensex using the formula written above. For all your assistance you can choose 5paisa.

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