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India's Economic Pulse: The Sensex Story
22 May
Summary
- Sensex tracks 30 major Indian companies on the BSE.
- The index uses a free-float market cap-weighted calculation.
- Sensex surged from 5,000 in 2000 to over 65,000 in 2023.
The S&P BSE Sensex, established in 1986, is India's premier stock market index, comprising 30 large, financially sound companies listed on the Bombay Stock Exchange (BSE). It serves as a bellwether for the Indian economy, reflecting its development and industry fluctuations. The index's calculation methodology evolved from market capitalization to a free-float adjusted system in September 2003, focusing on tradeable shares.
As of December 29, 2023, the Sensex held an average market capitalization of $141.7 billion, with top holdings including HDFC Bank, Reliance Industries, and ICICI Bank. The index constituents are selected by the S&P BSE index Committee based on liquidity, revenue generation, and market capitalization.
Since India's economic liberalization in 1991, the Sensex has seen dramatic growth. It climbed from around 5,000 in 2000 to nearly 42,000 by January 2020. Despite a dip during the COVID-19 pandemic, it recovered robustly, surpassing 50,000 in 2021, 60,000 in 2022, and crossing 65,000 in 2023.
The growth of the Indian economy and its rising middle class, projected to constitute nearly 80% of households by 2030, are closely linked to the Sensex's performance. For global investors seeking exposure to India's burgeoning market, the Sensex offers a reliable benchmark.
