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Basics of Indices: A tale of three indexes- Sensex, Nifty and SX40

Published on Saturday, October 18, 2014 by Dilip Davda | Modified on Friday, November 1, 2019

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A stock market index captures the behaviour of the overall equity market. Movements of the index represent the returns obtained by 'typical' portfolios in the country.

Before 1992 we just had one bourse i.e. BSE (The Bombay Stock Exchange) which was tracked for its indices movement under the leadership of Sensex (Sensitive Index). As known BSE was formed on 9th July 1875 as The Native Share and Stock Broker's Association and 31.08.1957, BSE came into existence as a recognized body under Securities Contracts (Regulation) Act (SCRA).

This barometer of BSE was launched on 02.01.1986 with a base year 1978-79 with a base value of 100) and thereafter, its product mix kept changing from time to time. This index is based on 30 prime stocks that are highly volatile and trading with high volume regularly.

Since then, this index has kept scoring with new benchmarks year after year. It will be interesting to see the movement of it since then till now. (See the table given below).

SENSEX History

Date Mile stone marked (i.e. closed above)
25.07.19901000
15.01.19922000
30.03.19924000
11.10.19995000
11.02.20006000 (touched in intraday)
02.06.20046000+
20059000+
07.02.200610000
200614000+
200720000+
200821000 (Historic high of 21206.77 in January 2008)
201321483.74
201427354.99 (All time high till 10.10.2014)

The latest Sensex pack includes following scrip:

500209 INFY, 532540 TCS,500112 SBI, 500470 TATASTEEL, 500510 LT, 507685 WIPRO, 500325 RELIANCE, 500103 BHEL, 500570 TATAMOTORS, 500440 HINDALCO, 532174 ICICIBANK, 500295 SSLT, 532215 AXISBANK, 500875 ITC, 500010 HDFC, 500180 HDFCBANK, 524715 SUNPHARMA, 500312 ONGC, 500087 CIPLA, 532500 MARUTI, 500182 HEROMOTOCO, 500124 DRREDDY, 532454 BHARTIARTL, 533278 COALINDIA, 500696 HINDUNILVR, 500520 M&M, 532977 BAJAJ-AUTO, 532555 NTPC, 532155 GAIL, 500400 TATAPOWER

In 1992, another bourse came into existence i.e. The National Stock Exchange (NSE) that started its premier benchmark Nifty which was consist of 50 stocks. In 1994 the exchange went live for equity trading and Nifty started rolling. On 03.01.1994 the Nifty was 1083.74 that marked the new milestone of 8180.20 in 2014. Movement of NSE Nifty can be seen from the following table.

NIFTY History

DateMile stone marked (i.e. closed above)
Jan 20042000 (Intraday)
Dec 20042000+
Feb 20063000+
Dec 20064000+
Sept 20075000+
Dec 20076000+
May 20147000+
Sept 20148000+
20148180.20 (All time high till now)

Latest Nifty pack includes following scrip:

Infosys, HCL Tech, Tech Mahindra, BPCL, Dr Reddy's, Hero Motocorp, BHEL, Asian Paints, TCS, Wipro, DLF, Power Grid, Lupin, IndusInd Bank, Kotak Bank, SBI, Cipla, ICICI Bank, Bank of Baroda, Coal India, IDFC, Sun Pharma, Maruti, HDFC Bank, Axis Bank, Bajaj Auto, Grasim, M & M, Ambuja Cement, Reliance Ind, ONGC, GAIL, ACC, Hind Unilever, Zee Ltd, PNB, Tata Power, ITC, L & T, Bharti Airtel, NTPC, Ultratech Cement, SSLT, HDFC, Jindal Steel, Cairn, NMDC, Tata Steel, Tata Motors, Hindalco.

In 2013, we had another bourse in play i.e. MCX-SX that launched its index called SX-40 (Forty). This index had a base date as 31.03.2010 with a base value of 10000. This exchange went live on 11.02.2013 with SX-40 at 11419.70.

SX-40 History

DateMile stone marked (i.e. closed above)
July 201312000+
March 201413000+
May 201414000+
June 201415000+
Sept 201416000+
201416129.59 (All time high)

Latest SX-40 includes following scrip:

ACC LTD AMBUJA CEMENTS LTD ASIAN PAINTS LTD BAJAJ AUTO LTD BHARTI AIRTEL LTD BHEL BHARAT PETROLEUM CORP LTD CAIRN INDIA LTD CIPLA LTD COAL INDIA LTD DR. REDDY'S LABORATORIES GAIL (INDIA) LTD HCL TECHNOLOGIES LTD HDFC LTD HDFC BANK LTD HERO MOTOCORP LTD HINDALCO INDUSTRIES LTD HINDUSTAN UNILEVER LTD. ICICI BANK LTD. INFOSYS LTD ITC LTD JINDAL STEEL & POWER LTD JAIPRAKASH ASSOCIATES LTD LARSEN & TOUBRO LTD. LUPIN LTD MAHINDRA & MAHINDRA LTD MARUTI SUZUKI INDIA LTD. NTPC LTD OIL AND NATURAL GAS CORP. POWER GRID CORP. LTD RELIANCE INDUSTRIES LTD SUN PHARMACEUTICALS IND. TATA MOTORS LTD TATA POWER CO LTD TATA STEEL LTD TATA CONSULTANCY SERV LTD TITAN INDUSTRIES LTD UNITED SPIRTS LTD WIPRO LTD ZEE ENETERTAINMENT LTD

Besides these benchmarks, all these bourses do have other sectoral indices as well among which Bankex or Bank Nifty are most sought after index on BSE and NSE.

BSE and NSE also have SME segment, which is known as BSE SME and NSE Emerge. Both this segment too has separate index parameters.

Alongside normal cash section, BSE and NSE too have F & O (derivatives), forex indices.

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About Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com


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