India Stock Exchanges can either be mutual group or multifirm. Probably, members of organization form to trade company stock and other securities. See analysis of market. And these members may act either as agent for their customers. But trade on an exchange is only by stock broker and members. However, there are two major exchanges in India. Like Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). You can read difference between NSE and BSE exchanges.
Bombay Stock Exchange (BSE)
BSE stands for Bombay Stock Exchange. However, Bombay Stock Exchange (BSE) located in Dalal Street, Mumbai. And it is oldest stock exchange in Asia. Therefore Bombay Stock Exchange has largest number of listed companies in world. Moreover, it is world best performing stock market. In addition, Bombay Stock Exchange has significant trading volume. Because, Bombay Stock Exchange is busiest exchange in India.
However, Bombay Stock Exchange was primarily known as Native share and Stock Brokers Association. It is incorporated in 1875. Therefore, BSE became first exchange in India and certified by administration. And In 1956 under Securities Contracts Regulation Act get permanent approval from Indian government. Moreover, Exchange has played an important part to increase of Indian investment market.
Similarly, currently 6000 companies are listed on BSE Index. And BSE 30 index is major market index. But it is used both in India and Asia. However, index measures from 30 powerhouse stocks traded on BSE. Hence, BSE 30 is health meter of overall stock exchange. View Bombay Stock Exchange company List. In addition, see share market live chat.
Features of Bombay stock exchange
BSE is very active stock exchange with highest number of listed securities in India. However, In India 7 0 % to 80 % of all transactions are done in BSE exchange. Therefore BSE has computerized its trading system by introducing BOLT (Bombay on Line Trading) Since March 1995. Bombay Stock exchange is operating BOLT at 275 cities with 5 lakh day traders.
In addition, BSE contain stocks, future stock, stock options, index futures, index options. Probably, BSE overall performance is measured by SENSEX an index of 30. Moreover, BSE largest stocks covering 12 sectors. However, BSE functions as first level regulator in Securities market. And it monitors and surveillance mechanisms that are able to detect irregularities and manipulations in stock price.
However, exchange also gives counter-party risk management in all transactions that take place on trading platform through its clearing and settlement services. BSE provides other services to capital market participants. And it contains risk management, clearing, settlement, market data services and education.
Probably, BSE system and process are designed to safeguard market. Hence, BSE also provides depository services through its Central Depository Services LTD (CDSL) View list of top stock exchanges. And exchanges make money in several different areas. You can see aims of Bombay stock exchange
Objective of Bombay stock exchange
However, to maintain well regulated market for dealing in securities. Because, it is safeguard for members’ interest. And to invest in public you have to deal on exchange. Therefore to help industrial development in country through well organized resource. Moreover, to establish and develop critical and fair practices in securities transactions.
Probably, exchange is professionally managed. Moreover, under direction of governing body, board of directors or executive committee. Therefore day to day exchange operations are managed. By managing director and CEO and an expert management team of professionals.
What is SENSEX
Sensex is known as S&P BSE Sensex index. And sensex is benchmark index of Bombay Stock Exchange (BSE). Therefore it is composed of 30 stocks. But it most actively traded stocks on BSE. Moreover, it provides an accurate gauge of India’s economy. Because, Sensex is oldest stock index in India. However, Sensex was launched in 1986. Hence, check BSE sensex chats.
Since 1986 Sensex has been calculating. And initially it was calculated based on total market capital. But this method has changed in 2003 to Free –float market capitalization method. Hence, these days Sensex is based on free float market cap of 30 sensex stocks. In addition, it is calculated for every 15 seconds. You can check eligibility criteria for selection & maintenance of SENSEX
S& P BSE Sensex also called BSE 30 or SENSEX. It is free float market weight stock market index of 30. And it is well-known and financial sound companies listed of Bombay stock exchange. Moreover, 30 companies are large and most active traded stocks. Therefore stocks are agent of various industrial sectors of Indian economy. Hence, S&P BSE SENSEX is view as pulse of domestic stock markets in India.
SENSEX stock market Index in India
Sensex (BSE30) is major stock market index. And it tracks performance of 30 major companies listed on BSE. However, companies are chosen based on liquidity, trade volume and industry image. Therefore India stock market (SENSEX) provides actual values, historical data, forecast. In addition, like chart, economic calendar and news. Hence, see Sensex Charts
What is an Index
Index is basically an indicator. Because, it gives you common idea about stocks going Up and down. And index shows overall average of all stocks listed in exchange. Because, their share prices vary as per stocks perform.
Index committee of BSE is charges with setting policies of index related issues. And index cell is responsible for daily maintenance of BSE indexes. Therefore index committee is made up of experts in all areas of capital market. Moreover, index committee meets every quarter to review all of BSE indexes.
Similarly, there is revision in index constituents. But they announce incoming and outgoing stocks is made six weeks in advance. Moreover, it changes are made in market cap calculations. And 30 sensex companies are selected and review from time to time by index committee. However, this index committee is made up of mutual fund managers, finance journalist. In addition, like independent governing board members and other participant in financial markets.
Sensex: main index of BSE consist of 30 stocks. It represents large well established. And financially sound companies across key sectors.
Mid cap: This contains scripts which gives market cap coverage between 80% to 95%.
Small Cap: scripts which give market cap overage between 95% to 100%.
BSE-500: It represents more than 93% of listed universe. Apart from these, BSE also have volatility index, thematic. In addition, like sectoral indices and investment strategy indices. See list of BSE SENSEX companies. Below find list of Indices.
- S&P BSE Sensex
- S&P BSE 100
- S&P BSE 200
- S&P BSE 500
- S&P BSE MidCap
- S&P BSE SmallCap
- S&P BSE Carbonex
- S&P BSE Greenex
- S&P BSE AllCap
- S&P BSE LargeCap
- S&P BSE MidCap Select Index
- S&P BSE SmallCap Select Index
- S&P BSE Sensex 50
- S&P BSE Sensex Next 50
How Sensex is calculated
Sensex is calculating using Free –float market capitalization method. Therefore to calculate it takes 30 stock prices from different BSE listed companies. Moreover, this is best method for calculating stock market index. Probably, Sensex calculating method and 30 companies are changed from time to time.
Formula for calculating SENSEX = (sum of free float market cap of 30 benchmark stock*Index factor.
Assume SENSEX has only 2 stocks namely SBI and Reliance. Therefore SBI has 500 shares, out of which 200 are held by government. And only 300 are available for public trading. Moreover, reliance has 1000 shares out of which 500 are by promoters. And 500 are available for trading. Hence, assume price of SBI stock is Rs 100 and reliance is Rs.200. So free floating market cap of these 2 companies.
(300*100+500*200) = 300000+100000= Rs. 130000
Assume Market cap during year 1978-79 was Rs.25000
Then SENSEX = 130000*100/25000 = 520 Hence, methodology in example is exactly to calculate Sensex. But only difference being addition of 30 stocks. Sensex stands for sensitive index.
However, to make sensex an exact index. And so Bse stocks represents properly. For better understand how sensex is calculated. You simply need to understand about Free-float market capitalization means. Hence, you need to understand market capitalization means.
What is Market capitalization
Market cap or market capitalization is simply worth of company shares. It means if you want to buy all shares of particular company. And what is amount you have to pay. So that amount is called market capitalization.
However, to calculate market cap of particular company. It simply multiply current share price by number of shares issued by company. But depending on value of market cap. And company will either be mid cap, large cap or small cap. See how to calculate market cap of particular company. Hence, in front of market cap will be market cap value. You need to understand free float market cap.
Finally, track movement of sector indices. Therefore check out companies included in these indices. However, sector is likely to give you best returns. And also study their performances and take an investment decision.