Bombay Stock Exchange, S&P BSE Indices, Sensex – What is it?Nagpur Investment

Types of S&P BSE Indices and What They Mean

What is the S&P BSE Sensex Index?

Frequently Asked Questions (FAQs)

Established in 1875 in Dalal Street of Mumbai, BSE Limited (formerly, Bombay Stock Exchange) is the oldest stock exchange in Asia. The stock exchange provides investors a trading platform to purchase and sell equity and fixed-income securities or shares of companies listed on the stock exchange.

Like Nifty Indices used by its peer National Stock Exchange (NSE), BSE uses S&P BSE Indices to track benchmark performance of shares of companies listed on the exchange. There are over 85 S&P BSE indices whose job is to read movements of the stock market using the weighted average and market capitalization of companies representing different sectors of the economy.

The S&P BSE Sensex, like NIFTY 50 of NSE, is the most referred index used by the BSE to track how the stock market is performing. It consists of 30 selected actively traded stocks of companies listed at BSE. Overall, S&P BSE indices are calculated using free-float market capitalization method, helpful for benchmarking fund portfolios, launching of index funds, exchange traded funds (ETFs), and other trading options.

Let’s take a closer look at classification of S&P BSE indices and what they mean.

S&P Dow Jones Indices and the BSE Limited have a strategic partnership to calculate, disseminate, and license a suite of BSE indices — hence, called S&P BSE Indices. These indices are used to track benchmark performance of equity and fixed-income market securities.

Equity market indices include BSE Sensex market capitalization broad Indices, sector and industry, thematics, strategy, sustainability, and volatility indices. Similarly, BSE uses composite, government, corporate and money market indices to track fixed-income markets.

Here’s what they mean.

The broad-based indices cover large-cap, mid-cap, and small-cap companies. There are 23 BSE Sensex market cap broad indices as of Mar. 31, 2023, which act as market indicators for the Indian stock market. Some broad-based indices include the following:

Sectoral indices serve as a benchmark for measuring the performance of stocks of companies representing several broadly defined economic sectors. The indices include companies in the S&P BSE 500 index that represent nine sectors of the economy and contain a minimum of 10 companies per index.Varanasi Investment

Currently, there are 20 S&P BSE sectoral indices, including:

Thematic indices is another calculation method used by the S&P BSE to measure the performance of companies that represent a movement in a specific theme. Currently, there are nine thematic indices managed by S&P BSE, including:

Similarly, strategy-based investment indices managed by S&P BSE include:

Such indices measure securities of companies that meet sustainability investment criteria, commitment to mitigating risks arising from climate change, as well as performance of the top 25 “green” companies listed at BSE.

Realized Volatility indices measure the historic volatility of the S&P BSE Sensex.

There is currently one composite index.Surat Wealth Management

Such indices are designed to track the performance of local-currency denominated sovereign and government bonds as well as government bills, etc.

Such indices are designed to track the performance of local-currency denominated bonds of companies representing corporate, financials, services, utilities, and industrial sectors.

Related: India Stock Market News March 2023

S&P BSE Sensex is an index with 30 companies selected from the S&P BSE 100 index listed at BSE. Stocks are either large-cap or mega cap, where the company’s main revenue is derived from its main activities.

The value of S&P BSE Sensex is calculated on the basis of free float market capitalization method. The index measures market movements based on which investors make trading decisions.

The performance of S&P BSE Sensex helps investors understand how the overall equity market is performing. When there are more buyers of stocks, the reading in the S&P BSE Sensex chart goes up representing the cost of shares, and more sellers reduces the price and the reading goes down.

Similar to S&P BSE Sensex is the NIFTY 50 index used by the NSE that tracks performance of 50 large and liquid stocks, using weighted average and market capitalization calculation methods.Jaipur Wealth Management

Helpful Resources

What Is Sensex And How To Invest In It In March 2023?

What Is Nifty, Types Of Indices, And What They Mean

What Is The Difference Between BSE S&P Sensex and NIFTY 50?Kanpur Investment