This article explains how the value of the “BSE Sensex” or “sensitive index” is calculated. If you are not sure what we mean by the Sensex or what the Sensex is all about, you can find this out by reading our “How to make money in the stock market?” article.
The Sensex has a very important function. The Sensex is supposed to be an indicator of the stocks in the BSE. It is supposed to show whether the stocks are generally going up, or generally going down.
To show this accurately, the Sensex is calculated taking into consideration stock prices of 30 different BSE listed companies. It is calculated using the “free-float market capitalization” method. This is a world wide accepted method as one of the best methods for calculating a stock market index.
Please note: The method used for calculating the Sensex and the 30 companies that are taken into consideration are changed from time to time. This is done to make the Sensex an accurate index and so that it represents the BSE stocks properly.
To really understand how the Sensex is calculated, you simply need to understand what the term “free-float market capitalization” means. (As we said earlier, the Sensex is calculated on basis of the “free-float market capitalization” method) But, before we understand what “free-float market capitalization” means, you first need to understand what “market capitalization” means.
Sunday, September 13, 2009
IAS OUR DREAM COMPLETED SEVEN YEARs ON AUGUST 13,2016
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- India and Denmark sign MoU on Labour Mobility Part...
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- Hmm watch this
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- Sunday Dhamaka (Watch inspirational videos)
- MUST watch
- Chronology of Ancient Indian History
- Some Appointments this year
- How to read newspaper
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- Shanti Swarup Bhatnagar Awards 2009 announced
- CONSTITUTION OF INDIA
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- special - Maoists: We control 5,000 villages
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- The ABC of N-subs
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- Fundamental rights which are involved in the issue...
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- Haier appoints new India head
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- The Gas Authority of India Ltd(GAIL)
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- Interview Questions which may be asked in 2009
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- New Japanese Prime Minister Yukio Hatoyama
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