how to calculate sensex?

Answer 1

study graphs, but to no avail. The market doesnt tell you if it is going up or down!!

Answer 2

Sensex, simply means sensitive index of the stocks that are listed and are categorised by BSE as "A" Group shares.

Originally this category had only 30 scrips. Now the list has been expanded to include 100 scrips.

Sensex is the change that takes place in these scrips on a daily basis and the gain is indicated both in percentages and in absolute terms of the sensex. Thus you see the headlines as

Sensex gains 1% at 10000.

Compared to the original value of sensex (I guess this started in either 1960 or 1980), and kept building on to the current level of abour 10000.

Answer 3

SENSEX is a basket of 30 constituent stocks representing a sample of large, liquid and representative companies.

SENSEX is calculated using the "Free-float Market Capitalization" methodology. As per this methodology, the level of index at any point of time reflects the Free-float market value of 30 component stocks relative to a base period. The market capitalization of a company is determined by multiplying the price of its stock by the number of shares issued by the company. This market capitalization is further multiplied by the free-float factor to determine the free-float market capitalization.


Qualification Criteria:

The general guidelines for selection of constituent scrips in SENSEX are as follows:

A. Quantitative Criteria:
Final Rank:The scrip should figure in the top 100 companies listed by Final Rank. The final rank is arrived at by assigning 75% weightage to the rank on the basis of six-month average full market capitalisation and 25% weightage to the liquidity rank based on six-month average daily turnover & six-month average impact cost.


Trading Frequency:The scrip should have been traded on each and every trading day for the last six months. Exceptions can be made for extreme reasons like scrip suspension etc.


Market Capitalization Weightage:The weight of each scrip in SENSEX based on six-month average Free-Float market capitalisation should be at least 0.5% of the Index.


Industry Representation:Scrip selection would take into account a balanced representation of the listed companies in the universe of BSE. The index companies should be leaders in their industry group.


Listed History:The scrip should have a listing history of at least 3 months on BSE. However, the Committee may relax the criteria under exceptional circumstances.


B. Qualitative Criteria:
Track Record:
In the opinion of the Committee, the company should have an acceptable track record.

Answer 4

BSE Sensex comprises of 30 stocks. It is calculated by taking the weighted average of these 30 stocks.
These 30 stocks are subject to changes made by the BSE aythorities.