Glossary term
Sensex: Meaning and Definition
Reviewed and approved by Dr. Anamika ShrivastavaPublished Last updated
The Sensex is the benchmark stock market index of the Bombay Stock Exchange, made up of 30 large and actively traded companies from major sectors. Its base year is 1978–79, with a base value of 100. A rising Sensex indicates growing investor confidence in listed companies.
In more detail
The Sensex tracks 30 large, actively traded companies, weighted by the market value of shares available to the public. Because it covers only a small set of firms, it reflects investor sentiment about large listed companies, not the whole economy. Its base year is 1978–79 with a base value of 100.
Example
If the Sensex rises from 70,000 to 71,400, it has gone up by 1,400 points, or 2 per cent.
Key points
- Covers 30 large companies.
- Base year 1978–79 = 100.
- An indicator of market sentiment, not of the whole economy.
Common mistake
Taking a rise in the Sensex as proof that the whole economy is doing well.
Related terms
Where it is explained
This term is explained in Class 11 Statistics Chapter 7: Index Numbers.