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BSE
30 - Bombay Stock Exchange Sensitive Index
The
BSE Sensex or Bombay Stock Exchange Sensitive
Index or BSE 30 is a value-weighted index composed
of 30 stocks with the base April 1979 = 100. It consists
of the 30 largest and most actively traded stocks, representative
of various sectors, on the Bombay Stock Exchange. These
companies account for around one-fifth of the market capitalization
of the BSE.
The
base value of the Sensex is 100 on April 1, 1979,
and the base year of BSE-SENSEX is 1978-79.
At
irregular intervals, the Bombay Stock Exchange (BSE) authorities
review and modify its composition to make sure it reflects
current market conditions.
The
index has increased by over ten times from June 1990 to
today. Using information from April 1979 onwards, the
long-run rate of return on the BSE Sensex works out to
be 18.6% per annum, which translates to roughly 9% per
annum after compensating for inflation. [1]
Sensex
milestones
Here
is a timeline on the rise and rise of the Sensex through
Indian stock market history.
- 1000,
July 25, 1990 - On July 25, 1990, the Sensex touched
the four-digit figure for the first time and closed
at 1,001 in the wake of a good monsoon and excellent
corporate results.
- 2000,
January 15, 1992 - On January 15, 1992, the Sensex
crossed the 2,000-mark and closed at 2,020 followed
by the liberal economic policy initiatives undertaken
by the then finance minister and current Prime Minister
Dr Manmohan Singh.
- 3000,
February 29, 1992 - On February 29, 1992, the Sensex
surged past the 3000 mark in the wake of the market-friendly
Budget announced by the then Finance Minister, Dr Manmohan
Singh.
- 4000,
March 30, 1992 - On March 30, 1992, the Sensex crossed
the 4,000-mark and closed at 4,091 on the expectations
of a liberal export-import policy. It was then that
the Harshad Mehta scam hit the markets and Sensex witnessed
unabated selling.
- 5000,
October 11, 1999 - On October 8, 1999, the Sensex
crossed the 5,000-mark as the BJP-led coalition won
the majority in the 13th Lok Sabha election.
- 6000,
February 11, 2000 - On February 11, 2000, the infotech
boom helped the Sensex to cross the 6,000-mark and hit
and all time high of 6,006.
- 7000,
June 21, 2005 - On June 20, 2005, the news of the
settlement between the Ambani brothers boosted investor
sentiments and the scrips of RIL, Reliance Energy, Reliance
Capital and IPCL made huge gains. This helped the Sensex
crossed 7,000 points for the first time.
- 8000,
September 8, 2005 - On September 8, 2005, the Bombay
Stock Exchange's benchmark 30-share index -- the Sensex
-- crossed the 8000 level following brisk buying by
foreign and domestic funds in early trading.
- 9000,
December 09, 2005 - The Sensex on November 28, 2005
crossed 9000 to touch 9000.32 points during mid-session
at the Bombay Stock Exchange on the back of frantic
buying spree by foreign institutional investors and
well supported by local operators as well as retail
investors.
- 10,000,
February 7, 2006 - The Sensex on February 6, 2006
touched 10,003 points during mid-session. The Sensex
finally closed above the 10K-mark on February 7, 2006.
- 11,000,
March 27, 2006 - The Sensex on March 21, 2006 crossed
11,000 and touched a peak of 11,001 points during mid-session
at the Bombay Stock Exchange for the first time. However,
it was on March 27, 2006 that the Sensex first closed
at over 11,000 points.
- 12,000,
April 20, 2006 - The Sensex on April 20, 2006 crossed
12,000 and touched a peak of 12,004 points during mid-session
at the Bombay Stock Exchange for the first time.
- 13,000,
October 30, 2006 - The Sensex on October 30, 2006
crossed 13,000 and still riding high at the Bombay Stock
Exchange for the first time. It took 135 days to reach
13,000 from 12,000. And 124 days to reach 13,000 from
12,500. On 30th October 2006 it touched a peak of 13,039.36
& closed at 13,024.26.
- 14,000,
December 5, 2006 - The Sensex on December 5, 2006
crossed 14,000 and touched a peak of 14028 at 9.58AM(IST)
while opening for the day December 5, 2006.
- 15,000,
July 6, 2007- The Sensex on July 6, 2007 crossed
another milestone and reached a magic figure of 15,000.
it took almost 7 month and 1 day to touch such a historic
milestone.
- 16,000,
September 19, 2007- The Sensex on September 19,
2007 crossed the 16,000 mark and reached a historic
peak of 16322 while closing. The bull hits because of
the rate cut of 50 bps in the discount rate by the Fed
chief Ben Bernanke in US.
- 17,000,
September 26, 2007- The Sensex on September 26,
2007 crossed the 17,000 mark for the first time, creating
a record for the second fastest 1000 point gain in just
5 trading sessions. It failed however to sustain the
momentum and closed below 17000. The Sensex closed above
17000 for the first time on the following day. Reliance
group has been the main contributor in this bull run,
contributing 256 points. This also helped Mukesh Ambani's
net worth to grow to over $50 billion or Rs.2 trillion.
It was also during this record bull run that the Sensex
for the first time zoomed ahead of the Nikkei
of Japan.
- 18,000,
October 9, 2007- The Sensex crossed the 18k mark
for the first time on October 9, 2007. The journey from
17k to 18k took just 8 trading sessions which is the
third fastest 1000 point rise in the history of the
sensex. The sensex closed at 18,280 at the end of day.
This 788 point gain on 9th October was the second biggest
single day absolute gains.
- 19,000,
October 15, 2007- The Sensex crossed the 19k mark
for the first time on October 15th 2007. It took just
4 days to reach from 18k to 19k. This is the fastest
1000 points rally ever and also the 640 point rally
was the second highest single day rally in absolute
terms. This made it a record 3000 point rally in 17
trading sessions overall.
- 20,000,
October 29, 2007- The Sensex crossed the 20k mark
for the first time with a massive 734.5 point gain but
closed below the 20k mark. It took 11 days to reach
from 19k to 20k. The journey of the last 10,000 points
was covered in just 869 sessions as against 7,297 sessions
taken to touch the 10,000 mark from 1,000 levels. In
2007 alone, there were six 1,000-point rallies for the
Sensex.
- 21,000,
January 8, 2008 Business Standard
Major
crashes since 2000
May
2006
On
May 22, 2006, the Sensex plunged by 1100 points during
intra-day trading, leading to the suspension of trading
for the first time since May 17, 2004. The volatility
of the Sensex had caused investors to lose Rs 6 lakh crore
($131 billion) within seven trading sessions. The Finance
Minister of India, P. Chidambaram, made an unscheduled
press statement when trading was suspended to assure investors
that nothing was wrong with the fundamentals of the economy,
and advised retail investors to stay invested. When trading
resumed after the reassurances of the Reserve Bank of
India and the Securities and Exchange Board of India (SEBI),
the Sensex managed to move up 700 points, still 450 points
in the red.
The
Sensex eventually recovered from the volatility, and on
October 16, 2006, the Sensex closed at an all-time high
of 12,928.18 with an intra-day high of 12,953.76. This
was a result of increased confidence in the economy and
reports that India's manufacturing sector grew by 11.1%
in August 2006.
Effects
of the subprime crisis in the US
On
July 23, 2007, the Sensex touched a new high of 15,733
points. On July 27, 2007 the Sensex witnessed a huge correction
because of selling by Foreign Institutional Investors
and global cues to come back to 15,160 points by noon.
Following global cues and heavy selling in the international
markets, the BSE Sensex fell by 615 points in a single
day on August 1, 2007.
Participatory
notes issue
On
October 16, 2007, SEBI (Securities & Exchange Board
of India) proposed curbs on participatory notes which
accounted for roughly 50% of FII investment in 2007. SEBI
was not happy with P-notes because it was not possible
to know who owned the underlying securities, and hedge
funds acting through P-notes might therefore cause volatility
in the Indian markets.
However
the proposals of SEBI were not clear and this led to a
knee-jerk crash when the markets opened on the following
day (October 17, 2007). Within a minute of opening trade,
the Sensex crashed by 1744 points or about 9% of its value
- the biggest intra-day fall in Indian stock markets in
absolute terms till then. This led to automatic suspension
of trade for 1 hour. Finance Minister P. Chidambaram issued
clarifications, in the meantime, that the government was
not against FIIs and was not immediately banning PNs.
After the market opened at 10:55 AM, the index staged
a comeback and ended the day at 18715.82, down 336.04
from the last day's close.
This
was, however not the end of the volatility. The next day
(October 18, 2007), the Sensex tumbled by 717.43 points
— 3.83 per cent — to 17998.39. The slide continued
the next day when the Sensex fell 438.41 points to settle
at 17559.98 at the end of the week, after touching the
lowest level of that week at 17226.18 during the day.
After
detailed clarifications from the SEBI chief M. Damodaran
regarding the new rules, the market made a 879-point gain
on October 23, thus signalling the end of the PN crisis.
January
2008
In
the third week of January 2008, the Sensex experienced
huge falls along with other markets around the world.
On 21 January 2008, the Sensex saw its highest ever loss
of 1,408 points at the end of the session. The Sensex
recovered to close at 17,605.40 after it tumbled to the
day's low of 16,963.96, on high volatility as investors
panicked following weak global cues amid fears of a recession
in the US.
The
next day, the BSE Sensex
index went into a free fall. The index hit the lower circuit
breaker in barely a minute after the markets opened at
10 AM. Trading was suspended for an hour. On reopening
at 10.55 AM IST, the market saw its biggest intra-day
fall when it hit a low of 15,332, down 2,273 points. However,
after reassurance from the Finance Minister of India,
the market bounced back to close at 16,730 with a loss
of 875 points.[2]
Over
the course of two days, the BSE
Sensex in India dropped from 19,013 on Monday
morning to 16,730 by Tuesday evening or a two day fall
of 13.9%.[2]
Companies
in the Sensex
List
of BSE Sensex companies provides the full list of companies
that have been part of the BSE Sensex since its inception
in 1986 (baselined to 1979).
(as
of October 31, 2007) [3]
.**DLF
replaced Dr. Reddy's Lab on 19th November, 2007.
Sensex
falls
The
top ten single-day falls of the Sensex has occurred on
the following dates [2]:
- Jan
21, 2008 --- 1,408.35 points
- Mar
17, 2008 --- 951.03 points
- Jan
22, 2008 --- 857 points
- Feb
11, 2008 --- 833.98 points
- May
18, 2006 --- 826 points
- Mar
13, 2008 --- 770.63 points
- Dec
17, 2007 --- 769.48 points
- Oct
17, 2007 --- 717.43 points
- Jan
18, 2007 --- 687.82 points
- Nov
21, 2007 --- 678.18 points
- Aug
16, 2007 --- 642.70 points
- Apr
2, 2007 --- 616.73 points
References
External
links
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