Sensitive Index, popularly known as the Sensex, is a weighted stock market index of the top 30 companies in India that trade on the Bombay Stock Exchange (BSE). The index includes well-established companies that trade on the BSE.
Calculation method
The method of calculation of Sensex is a free-floating market capitalization method. The list of companies included in the sensex could keep on changing. An index committee selects and reviews the 30 companies that comprise the Sensex regularly. This committee comprises academics, mutual fund managers, finance journalists, independent governing board members, and other financial market participants. While doing so, the committee adheres to a set of criteria. The Index reflects the general market tendency and consumer confidence.
Sensex 30 Companies Weightage
| SL | Name | Industry | Mcap Full (Cr.) | M.Cap FF (Cr.) | Weight | |
| 1 | RIL | Integrated Oil & Gas | 16,93,170.17 | 8,63,516.78 | 12.91% | |
| 2 | HDFCBANK | Banks | 8,87,210.54 | 7,00,896.33 | 10.48% | |
| 3 | INFOSYS | IT Consulting & Software | 7,31,107.12 | 6,36,063.19 | 9.51% | |
| 4 | HDFC | Housing Finance | 4,91,841.14 | 4,91,841.14 | 7.35% | |
| 5 | ICICIBANK | Banks | 4,87,388.37 | 4,87,388.37 | 7.29% | |
| 6 | TCS | IT Consulting & Software | 14,55,687.69 | 4,07,592.55 | 6.09% | |
| 7 | KOTAKBANK | Banks | 3,83,866.29 | 2,84,061.05 | 4.25% | |
| 8 | HINDUNILVR | Personal Products | 6,20,362.58 | 2,35,737.78 | 3.52% | |
| 9 | L&T | Construction & Engineering | 2,42,626.23 | 2,08,658.56 | 3.12% | |
| 10 | BAJFINANCE | Finance (including NBFCs) | 4,66,940.59 | 2,05,453.86 | 3.07% | |
| 11 | ITC | Cigarettes,Tobacco Products | 2,85,400.36 | 2,02,634.25 | 3.03% | |
| 12 | AXISBANK | Banks | 2,39,719.67 | 2,01,364.52 | 3.01% | |
| 13 | SBIN | Banks | 4,08,479.47 | 1,75,646.17 | 2.63% | |
| 14 | BHARTIARTL | Telecom Services | 3,81,915.58 | 1,64,223.70 | 2.46% | |
| 15 | ASIANPAINT | Furniture,Furnishing,Paints | 3,17,168.34 | 1,49,069.12 | 2.23% | |
| 16 | HCLTECH | IT Consulting & Software | 3,58,760.09 | 1,43,504.04 | 2.15% | |
| 17 | BAJAJFINSV | Holding Companies | 2,79,316.45 | 1,06,140.25 | 1.59% | |
| 18 | Tata Steel | Iron & Steel/Interm.Products | 1,56,552.34 | 1,03,324.55 | 1.54% | |
| 19 | MARUTI | Cars & Utility Vehicles | 2,24,317.10 | 98,699.52 | 1.48% | |
| 20 | TITAN | Other Apparels & Accessories | 2,09,300.03 | 98,371.01 | 1.47% | |
| 21 | TECHM | IT Consulting & Software | 1,39,638.87 | 89,368.88 | 1.34% | |
| 22 | SUNPHARMA | Pharmaceuticals | 1,97,064.51 | 88,679.03 | 1.33% | |
| 23 | ULTRACEMCO | Cement & Cement Products | 2,11,782.31 | 84,712.92 | 1.27% | |
| 24 | M&M | Cars & Utility Vehicles | 1,09,059.07 | 83,975.48 | 1.26% | |
| 25 | INDUSINDBK | Banks | 90,784.83 | 70,812.17 | 1.06% | |
| 26 | NESTLEIND | Packaged Foods | 1,83,151.78 | 67,766.16 | 1.01% | |
| 27 | NTPC | Electric Utilities | 1,36,819.96 | 67,041.78 | 1.00% | |
| 28 | POWERGRID | Electric Utilities | 1,30,894.37 | 64,138.24 | 0.96% | |
| 29 | DRREDDYS | Pharmaceuticals | 80,684.51 | 58,899.69 | 0.88% | |
| 30 | BAJAJ AUTO | 2/3 Wheelers | 1,10,386.28 | 49,673.83 | 0.74% | |
Source: https://www.bseindia.com/
Sensex and retail investor
If you are closely following stock markets news every day, you will not be hearing much about individual stocks day to day, but daily closing bells mark the closing of Sensex, informing where the index has closed this day and how much it has moved up or has gone down. When you understand broadly what constitutes an index, it becomes easier to infer that information. For a retail investor, this market information can act as a gist of the day if close monitoring is difficult.
Conclusion
Knowledge of Sensex and stocks that constitute it is necessary if you are an investor in Indian stock markets. The individual weightage of a stock in the index helps you decide how much weightage you should give the same in your own portfolio. Investment in stocks of Sensex is a prudent choice. If Sensex is your Index choice to see Indian stock markets, you can choose to invest in Sensex through its ETF also.
