The BSE SENSEX, also known as the Stock Exchange Sensitive Index, is like the VIP list of the Bombay Stock Exchange (BSE), featuring 30 of the most stable and prosperous companies. Sensex stands for Stock Exchange Sensitive Index.
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| The tile grid visualization shows the 30 companies that are part of Sensex and their performance as on 4th July 2024. Source: bseindia.com |
The BSE SENSEX is India’s most tracked bellwether index. It was launched on 1st January 1986. It has changed its nature over the years, from being full market-cap weighted to free-float market cap weighted.
On July 25, 1990, the SENSEX closed at 1,001, marking its first venture into four-digit territory. It then crossed the 10,000 threshold on February 7, 2006, achieving this milestone over a span of 20 years.
Remarkably, it only took 8 months and 139 trading sessions for the SENSEX to climb from 70,000 to 80,000 points, gaining 10,000 points in the process as the line graph below shows.
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| Source: Bloomberg, NDTV Profit |
In the last decade, the Sensex has more than tripled.
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| The Area chart shows how the Sensex performed from 2014 to 2024. There was a significant dip in 2020 due to the COVID-19 pandemic. |
Nifty stands for 'National Stock Exchange Fifty' and is the index for the National Stock Exchange. The Nifty 50 was launched on April 22nd, 1996.
The Nifty index, with its high number of active traders, liquidity, and frequent transactions, holds a significant numerical advantage over the Sensex.
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| Source - The Times of India |
The below heat map visualization of Nifty monthly returns shows the historical trend analysis from 1994 to June 2024, making it easy to spot seasonality and year-over-year comparisons. Over the span of three decades, Nifty has delivered an average return of 14.2%.
It has taken the Sensex around 2-3 years to regain its all-time high after slipping (over 20%). Most corrections (10-15%) typically recover within 3-6 months. However, this timeframe can vary significantly depending on various market and economic factors.
The broader the index, the better the returns.
The Nifty 500 Equal Weight index works the best when there’s a broad-based rally. However, the trend changes during polarised rallies.
How the Bombay Stock Exchange's 5 most valuable firms compare with their Dow Jones counterparts
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