Why does the Sensex go up and down?

The Sensex fluctuates based on the collective stock prices of its 30 constituent companies. If the majority of these companies release positive earnings, or if foreign institutional investors (FIIs) pump money into the market, the prices go up, driving the index higher.

What is the base year and base value of Sensex?

The base year for the Sensex is 1978-79 with an initial base index value of 100.

How often is the Sensex rebalanced?

The Sensex is reviewed and rebalanced semi-annually in June and December by the Asia Index Private Limited (AIPL) Index Committee.

Which company has the highest weight in Sensex?

Heavyweights like HDFC Bank, Reliance Industries, ICICI Bank, Infosys, and TCS typically hold the highest free-float weightage in the Sensex.

What is the difference between Sensex and Nifty 50?

Sensex tracks 30 companies listed on the BSE with a base year of 1978-79 (base 100). Nifty 50 tracks 50 companies listed on the NSE with a base year of 1995 (base 1,000).

How can a beginner start investing in Sensex?

Beginners can invest in Sensex index funds or Sensex ETFs through any SEBI-registered mutual fund platform or stockbroker app via monthly SIPs.

What does a 500-point fall in Sensex mean?

A 500-point drop means the aggregate free-float market value of the 30 Sensex constituent companies declined relative to the total market, reflecting market-wide selling pressure.

MarketsKnowledge BaseSensex

Indian Stock Market BasicsBeginner 8 Min Read

What is Sensex? The Barometer of the Indian Economy

Learn what the BSE Sensex is, how it is calculated using the free-float market capitalization method, and why it tracks 30 of India's largest companies.

Base Year

1978-79

Base value set at 100

Constituents

30 Companies

Top companies by market cap

Methodology

Free-Float

Free-float market capitalization

Review Cycle

Semi-Annual

Rebalanced in June & December

Indian Stock Market BasicsBeginner 8 Min Read

What is Sensex? The Barometer of the Indian Economy

Learn what the BSE Sensex is, how it is calculated using the free-float market capitalization method, and why it tracks 30 of India's largest companies.

SensexIndicesBSEMarket Benchmark

Essential Market Insights

1The Sensex (Sensitive Index) is the benchmark index of the Bombay Stock Exchange (BSE), tracking 30 of India's largest companies.

2It uses the Free-Float Market Capitalization methodology — only publicly tradeable shares count.

3Base year is 1978-79 with a base value of 100; it has since grown to 75,000+ and 80,000+ levels.

4The Sensex is rebalanced semi-annually (June and December) by the BSE Index Committee.

5You cannot buy the Sensex directly — invest via Sensex Index Funds or Sensex ETFs.

Key Formula

Sensex Value = (Sum of Free-Float Market Cap of 30 Companies / Base Market Cap) × Base Value (100)

Quick Reference Table

Metric	S&P BSE Sensex
Base Year	1978-1979
Base Value	100
Number of Constituents	30 Companies
Calculation Methodology	Free-Float Market Capitalization
Exchange	Bombay Stock Exchange (BSE)
Review Frequency	Semi-annually (June and December)

Historical Timeline

1978-79

Base Year Established

Established as the base year for Sensex calculation, with a base value of 100.

1986

Sensex Officially Launched

S&P BSE Sensex is officially launched and published.

1990

Crosses 1,000 Points

Sensex crosses the historic 1,000-point mark for the first time.

2003

Free-Float Methodology

BSE shifts the Sensex calculation methodology from full market capitalization to the globally accepted "Free-Float" methodology.

2024

Crosses 75,000+ & 80,000+

Sensex breaches historic all-time highs, crossing both 75,000 and 80,000 milestones for the first time in 2024.

1. What is the BSE Sensex?

The S&P BSE Sensex (short for Sensitive Index) is India's oldest stock market index. Coined by analyst Deepak Mohoni in 1986, the Sensex comprises 30 large, financially sound, and liquid companies cross-sectioned across major sectors of the Indian economy.

Because these 30 companies represent a dominant share of total Indian corporate revenue and market capitalization, movement in the Sensex reflects overall investor sentiment and national economic growth.

2. Calculation Method: Free-Float Market Capitalization

Since September 2003, the Sensex has been calculated using the Free-Float Market Capitalization method.

Under free-float methodology, promoter holdings, government stakes, strategic cross-holdings, and locked-in ESOP shares are excluded. Only shares available for public trading are multiplied by the stock price, ensuring that illiquid promoter shares do not artificially inflate index movements.

Frequently Asked Questions

Showing 6 of 8 FAQs

No, you cannot buy "Sensex" as a single stock because it is an index. However, you can invest in the Sensex by purchasing a Sensex Index Mutual Fund or a Sensex ETF (Exchange Traded Fund) which replicates the 30 companies in the exact same proportion.