Bse and Sensex

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M.Com Part I

12

ADVANCED FINANCIAL

ACCOUNTINGPROJECT WORKANALYSIS OF NIFTY AND SENSEX

Mahesh Chandra Mohanty


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ANALYSIS

OF

NIFTY

AND

SENSEX


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ACKNOWLEDGEMENT

First of all, I would like to send my sincere

thanks to Mr. Suresh Laurik for his helpful

hand in the completion of my project and I

would also like to take an opportunity to thank

all the people who helped me in collecting

necessary information and making of the report.

I am grateful to all of them for their time, energy

and wisdom.

Getting a project ready requires the work andeffort of many people. I would like all those who

have contributed in completing this project.

Mahesh Mohanty


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DECLARATION

I Mahesh Chandra Mohanty, Class M.com I of

Lords College, Mumbai hereby declare that the

project entitled Analysis of Nifty and Sensex. is

an original work and the same has not been

submitted to any other institutions for the award of

any other degree. The feasible suggestion has been

duly incorporated in consultation with the supervisior

Mahesh Mohanty


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INDEX

1. Introduction of Nifty

2. Partnership

3. Highlights

4. Eligibility Criteria

5. Index Calculation Formula

6. 50 Major Companies

7. Introduction of Sensex

8. Calculation

9. Constituents

10. Milestones

11. Major crashes in 2000

12. Major Falls

13. Conclusion

14. Bibliography


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S&P CNX Nifty

Introduction

The S&P CNX Nifty is the headline index on the NationalStock Exchange of India Ltd. (NSE). The Index tracks thebehavior of a portfolio of blue chip companies, the largestand most liquid Indian securities. It includes 50 of theapproximately 1430 companies listed on the NSE,

captures approximately 65% of its float-adjusted marketcapitalization and is a true reflection of the Indian stockmarket. The S&P CNX Nifty covers 22 sectors of theIndian economy and offers investment managersexposure to the Indian market in one portfolio. The S&PCNX Nifty stocks represents about 65% of the free floatmarket capitalization of the stocks listed at National Stock

Exchange (NSE) as on March 30, 2012.S&P CNX Nifty has shaped up as the largest

single financial product in India, with an ecosystemcomprising: exchange traded funds (onshore andoffshore), exchange-traded futures and options (at NSE inIndia and at SGX and CME abroad), other index funds andOTC derivatives (mostly offshore).

The S&P CNX Nifty index is a free float marketcapitalisation weighted index. The index was initiallycalculated on full market capitalisation methodology. FromJune 26, 2009, the computation was changed to free floatmethodology. The base period for the S&P CNX Nifty
http://en.wikipedia.org/wiki/Indian_economyhttp://en.wikipedia.org/wiki/National_Stock_Exchange_of_Indiahttp://en.wikipedia.org/wiki/National_Stock_Exchange_of_Indiahttp://en.wikipedia.org/wiki/National_Stock_Exchange_of_Indiahttp://en.wikipedia.org/wiki/National_Stock_Exchange_of_Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/SGXhttp://en.wikipedia.org/wiki/CMEhttp://en.wikipedia.org/wiki/CMEhttp://en.wikipedia.org/wiki/SGXhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/National_Stock_Exchange_of_Indiahttp://en.wikipedia.org/wiki/National_Stock_Exchange_of_Indiahttp://en.wikipedia.org/wiki/National_Stock_Exchange_of_Indiahttp://en.wikipedia.org/wiki/National_Stock_Exchange_of_Indiahttp://en.wikipedia.org/wiki/Indian_economy


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index is November 3, 1995, which marked the completionof one year of operations ofNSE's Capital MarketSegment. The base value of the index has been set at

1000, and a base capital of Rs 2.06 trillion.The S&P CNXNifty Index was developed by Ajay Shah and SusanThomas.

Nifty chart between the period 1992 -2012

Partnership

The S&P CNX Nifty is owned and managed by India IndexServices and Products Ltd. (IISL), which is a joint venturebetween the NSE and CRISIL. IISL is Indias firstspecialized company focused on an index as a coreproduct. IISL has a licensing and marketing agreementwith Standard & Poors, who is a world leader in indexservices.
http://en.wikipedia.org/wiki/National_Stock_Exchange_of_Indiahttp://en.wikipedia.org/wiki/National_Stock_Exchange_of_India


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Highlights

The S&P CNX Nifty is a 50 stock, float-adjusted market-capitalization weighted index for India, accounting for 21

diversified sectors of the economy. It is used for a varietyof purposes, such as benchmarking fund portfolios, indexbased derivatives and index funds.

The S&P CNX Nifty is derived from economic researchand is created for those interested in investing and tradingin Indian equities.

Market Representation.The S&P CNX Nifty stocks represent about 65% of the

total float-adjusted market capitalization of the NationalStock Exchange (NSE).

Diversification.

The S&P CNX Nifty is a diversified index, accuratelyreflecting the overall market. The reward-to-risk ratio ofS&P CNX Nifty is higher than other leading indices,offering similar returns but at lesser risk.

Liquidity.

Market impact cost is the best measure of the liquidity of a

stock. It accurately reflects the costs faced when actuallytrading an index. For a stock to qualify for inclusion in theS&P CNX Nifty, it has to reliably have market impact costbelow 0.50 %, when doing S&P CNX Nifty trades ofRupees (Rs) 20 million. The current impact cost of the


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S&P CNX Nifty for a portfolio size of Rs 20 million is0.13%.

Hedging Effectiveness.The basic risk of the S&P CNX Nifty futures is lower thanother index portfolios, due to the liquidity of the S&P CNXNifty constituent stocks and of the NSE. In addition, theS&P CNX Nifty has higher correlations with typicalinvestment portfolios in India, compared to other indices.These two factors allow for effective hedging of the Index.

Index Family

S&P CNX Defty. The S&P CNX Defty is a U.S. dollar-denominated index based on the S&P CNX Nifty. Thisindex was developed to provide a benchmark of Indianstocks to international investors, providing them with aninstrument for measuring returns on their equity

investment in dollar terms. This ensures that the riskarising out of currency fluctuation is covered through theS&P CNX Defty.

Eligibility Criteria

Selection of the index set is based on the following criteria: Liquidity (Impact Cost)

Float-Adjusted Market Capitalization

Float


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Domicile

Eligible Securities

Other Variables

Liquidity.

For inclusion in the index, the security should have tradedat an average impact cost of 0.50 % or less during the lastsix months, for 90% of the observations. Impact cost is thecost of executing a transaction in a security in proportionto its index weight, measured by market capitalization atany point in time. This is the percentage mark up sufferedwhile buying/selling the desired quantity of a securitycompared to its ideal price (best buy + best sell)/2.

Float-Adjusted Market Capitalization.

Companies eligible for inclusion in the S&P CNX Niftymust have at least twice the float-adjusted market

capitalization of the current smallest index constituent.

Float.

Companies eligible for inclusion in the S&P CNX Niftyshould have at least 10% of its stock available to investors(float). For this purpose, float is stocks which are not heldby the promoters and associated entities (where

identifiable) of such companies.


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Domicile.

The company must be domiciled in India and trade on theNSE.

Eligible Securities.

All common shares listed on the NSE (which are of equityand not of a fixed income nature) are eligible for inclusionin the S&P CNX Nifty index. Convertible stock, bonds,warrants, rights, and preferred stock that provide aguaranteed fixed return are not eligible.

Other Variables

A company which comes out with an IPO is eligible forinclusion in the index if it fulfills the normal eligibility criteriafor the index -- impact cost, float-adjusted marketcapitalization and float -- for a three-month period instead

of a six-month period.

Index Calculations Formulas

The S&P CNX Nifty index is computed by dividing thefloat-adjusted market

capitalization of the index component securities as ofcurrent date (MCn) by the float-

adjusted market capitalization of the same securities as ofinitial date (MC1) multiplied by

the index value as of initial date (I1):


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In = (I1 * MCn)/MC1

where:

MCn = Float-adjusted index market capitalization as ofthe current date.

MCn =

where:

Qi = Number of float adjusted shares outstanding of the ithissue as of the current date.

Pi = Security price of the ith issue as of the current date.

N = Total number of component securities used in theindex calculation.

The S&P CNX Nifty currently consists of the following

50 major Indian companies:

Here is the list of 50 companies that form part of S&P CNXNifty Index as on 30th April 2012:

ACC Ltd.Ambuja Cements

LtdAsian Paints Ltd.

Axis Bank Ltd.Bajaj Auto Ltd.

Bharat Petroleum

Corporation Ltd

Bharti Airtel Ltd. Bank of BarodaRanbaxyLaboratories Ltd.

Cairn India Ltd.Bharat HeavyElectricals Ltd.

RelianceIndustries Ltd.


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Cipla Ltd. Coal India Ltd.RelianceInfrastructure Ltd.

Hero MotoCorp

Ltd.

DLF Ltd. Sesa Goa Ltd.

HindalcoIndustries Ltd.

Dr. Reddy'sLaboratories Ltd.

Siemens Ltd.

HindustanUnilever Ltd.

GAIL (India) Ltd.State Bank ofIndia

HousingDevelopment

HCL TechnologiesLtd .

Steel Authority ofIndia Ltd.

I T C Ltd. HDFC Bank Ltd.Sterlite Industries(India) Ltd.

ICICI Bank Ltd.Jindal Steel &Power Ltd.

SunPharmaceuticalIndustries Ltd.

Infosys Ltd.Kotak MahindraBank Ltd.

Tata ConsultancyServices Ltd.

Infrastructure

DevelopmentFinance Co. Ltd.

Larsen & ToubroLtd. Tata Motors Ltd.

JaiprakashAssociates Ltd.

Mahindra &Mahindra Ltd.

Tata Power Co.Ltd.

Oil & Natural GasCorporation Ltd.

Maruti SuzukiIndia Ltd.

Tata Steel Ltd.

Power Grid

Corporation ofIndia Ltd. NTPC Ltd. Wipro Ltd.

FinanceCorporation Ltd.

Punjab NationalBank


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SENSEX

The Bombay Stock Exchange building located on DalalStreet, Mumbai.

The BSE SENSEX, also called the BSE 30 or simply the

SENSEX, is a free-float market capitalization-weighted

stock market index of 30 well-established and financially

sound companies listed on Bombay Stock Exchange

(BSE). The 30 component companies which are some ofthe largest and most actively traded stocks, are

representative of various industrial sectors of the Indian

economy.

Published since January 1, 1986, the SENSEX is

regarded as the pulse of the domestic stock markets in

India. The base value of the SENSEX is taken as 100 onApril 1, 1979, and its base year as 1978-79. On 25 July

2001 BSE launched DOLLEX-30, a dollar-linked version of

SENSEX. As of 21 April 2011, the market capitalisation of

SENSEX was about 29,733 billion (US$538 billion)

(42.34% of market capitalization of BSE), while its free-

float market capitalization was 15,690 billion (US$284billion).
http://en.wikipedia.org/wiki/Dalal_Streethttp://en.wikipedia.org/wiki/Dalal_Streethttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Capitalization-weighted_indexhttp://en.wikipedia.org/wiki/Stock_market_indexhttp://en.wikipedia.org/wiki/Bombay_Stock_Exchangehttp://en.wikipedia.org/wiki/Industryhttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Industryhttp://en.wikipedia.org/wiki/Bombay_Stock_Exchangehttp://en.wikipedia.org/wiki/Stock_market_indexhttp://en.wikipedia.org/wiki/Capitalization-weighted_indexhttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Dalal_Streethttp://en.wikipedia.org/wiki/Dalal_Street


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Calculation

The Bombay Stock Exchange regularly reviews and

modifies its composition to be sure it reflects current

market conditions. The index is calculated based on a freefloat capitalization method, a variation of the market

capitalization method. Instead of using a company's

outstanding shares it uses its float, or shares that are

readily available for trading. The free-float method,

therefore, does not include restricted stocks, such as

those held by promoters, government and strategicinvestors.

Initially, the index was calculated based on the "full market

capitalization method". However this was shifted to the

free float method with effect from September 1, 2003.

Globally, the free float market capitalization is regarded as

the industry best practice.As per free float capitalization methodology, the level of

index at any point of time reflects the free float market

value of 30 component stocks relative to a base period.

The market capitalization of a company is determined by

multiplying the price of its stock by the number of shares

issued by the company. This market capitalization is

multiplied by a free float factor to determine the free float

market capitalization. Free float factor is also referred as

adjustment factor. Free float factor represents the

percentage of shares that are readily available for trading.


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The calculation of SENSEX involves dividing the free float

market capitalization of 30 companies in the index by a

number called index divisor.The divisor is the only link to

original base period value of the SENSEX. It keeps theindex comparable over time and is the adjustment point for

all index adjustments arising out of corporate actions,

replacement of scrips, etc.

The index has increased by over ten times from June1990 to the present. Using information from April 1979onwards, the long-run rate of return on the BSE SENSEXworks out to be 18.6% per annum, which translates toroughly 9% per annum.

Constituents

Main article: List of BSE SENSEX companies

The BSE Sensex currently consists of the following 30major Indian companies as of 17 February 2012.[1]

No. Company Industry Scrip

1Housing Development

Finance Corporation Consumer finance 500010

2 Cipla Pharmaceuticals 500087

3Bharat Heavy

Electricals

Electrical

equipments500103
http://en.wikipedia.org/wiki/List_of_BSE_SENSEX_companieshttp://en.wikipedia.org/wiki/BSE_SENSEX#cite_note-0http://en.wikipedia.org/wiki/Housing_Development_Finance_Corporationhttp://en.wikipedia.org/wiki/Housing_Development_Finance_Corporationhttp://en.wikipedia.org/wiki/Housing_Development_Finance_Corporationhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500010http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500010http://en.wikipedia.org/wiki/Ciplahttp://en.wikipedia.org/wiki/Ciplahttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500087http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500087http://en.wikipedia.org/wiki/Bharat_Heavy_Electricalshttp://en.wikipedia.org/wiki/Bharat_Heavy_Electricalshttp://en.wikipedia.org/wiki/Bharat_Heavy_Electricalshttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500103http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500103http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500103http://en.wikipedia.org/wiki/Bharat_Heavy_Electricalshttp://en.wikipedia.org/wiki/Bharat_Heavy_Electricalshttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500087http://en.wikipedia.org/wiki/Ciplahttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500010http://en.wikipedia.org/wiki/Housing_Development_Finance_Corporationhttp://en.wikipedia.org/wiki/Housing_Development_Finance_Corporationhttp://en.wikipedia.org/wiki/BSE_SENSEX#cite_note-0http://en.wikipedia.org/wiki/List_of_BSE_SENSEX_companies


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4 State Bank Of India Banking 500112

5 HDFC Bank Banking 500180

6 Hero Motocorp Automotive 500182

7 InfosysInformation

Technology500209

8Oil and Natural Gas

Corporation Oil and gas 500312

9 Reliance Industries Oil and gas 500325

10 Tata Power Power 500400

11 Hindalco Industries Metals and Mining 500440

12 Tata Steel Steel 500470

13 Larsen & Toubro Conglomerate 500510

14 Mahindra & Mahindra Automotive 500520

15 Tata Motors Automotive 500570

16 Hindustan Unilever Consumer goods 500696

17 ITC Conglomerate 500875

18 Sterlite Industries Metals and Mining 500900
http://en.wikipedia.org/wiki/State_Bank_Of_Indiahttp://en.wikipedia.org/wiki/State_Bank_Of_Indiahttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500112http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500112http://en.wikipedia.org/wiki/HDFC_Bankhttp://en.wikipedia.org/wiki/HDFC_Bankhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500180http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500180http://en.wikipedia.org/wiki/Hero_Motocorphttp://en.wikipedia.org/wiki/Hero_Motocorphttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500182http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500182http://en.wikipedia.org/wiki/Infosyshttp://en.wikipedia.org/wiki/Infosyshttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500209http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500209http://en.wikipedia.org/wiki/Oil_and_Natural_Gas_Corporationhttp://en.wikipedia.org/wiki/Oil_and_Natural_Gas_Corporationhttp://en.wikipedia.org/wiki/Oil_and_Natural_Gas_Corporationhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500312http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500312http://en.wikipedia.org/wiki/Reliance_Industrieshttp://en.wikipedia.org/wiki/Reliance_Industrieshttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500325http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500325http://en.wikipedia.org/wiki/Tata_Powerhttp://en.wikipedia.org/wiki/Tata_Powerhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500400http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500400http://en.wikipedia.org/wiki/Hindalco_Industrieshttp://en.wikipedia.org/wiki/Hindalco_Industrieshttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500440http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500440http://en.wikipedia.org/wiki/Tata_Steelhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500470http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500470http://en.wikipedia.org/wiki/Larsen_%26_Toubrohttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500510http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500510http://en.wikipedia.org/wiki/Mahindra_%26_Mahindrahttp://en.wikipedia.org/wiki/Mahindra_%26_Mahindrahttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500520http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500520http://en.wikipedia.org/wiki/Tata_Motorshttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500570http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500570http://en.wikipedia.org/wiki/Hindustan_Unileverhttp://en.wikipedia.org/wiki/Hindustan_Unileverhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500696http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500696http://en.wikipedia.org/wiki/ITC_Limitedhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500875http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500875http://en.wikipedia.org/wiki/Sterlite_Industrieshttp://en.wikipedia.org/wiki/Sterlite_Industrieshttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500900http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500900http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500900http://en.wikipedia.org/wiki/Sterlite_Industrieshttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500875http://en.wikipedia.org/wiki/ITC_Limitedhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500696http://en.wikipedia.org/wiki/Hindustan_Unileverhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500570http://en.wikipedia.org/wiki/Tata_Motorshttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500520http://en.wikipedia.org/wiki/Mahindra_%26_Mahindrahttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500510http://en.wikipedia.org/wiki/Larsen_%26_Toubrohttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500470http://en.wikipedia.org/wiki/Tata_Steelhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500440http://en.wikipedia.org/wiki/Hindalco_Industrieshttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500400http://en.wikipedia.org/wiki/Tata_Powerhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500325http://en.wikipedia.org/wiki/Reliance_Industrieshttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500312http://en.wikipedia.org/wiki/Oil_and_Natural_Gas_Corporationhttp://en.wikipedia.org/wiki/Oil_and_Natural_Gas_Corporationhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500209http://en.wikipedia.org/wiki/Infosyshttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500182http://en.wikipedia.org/wiki/Hero_Motocorphttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500180http://en.wikipedia.org/wiki/HDFC_Bankhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500112http://en.wikipedia.org/wiki/State_Bank_Of_India


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19 WiproInformation

Technology

507685

20 Sun Pharmaceutical Pharmaceuticals 524715

21 GAIL Oil and gas 532155

22 ICICI Bank Banking 532174

23 Jindal Steel & Power Steel and power 532286

24 Bharti Airtel Telecommunication 532454

25 Maruti Suzuki Automotive 532500

26Tata Consultancy

Services

Information

Technology532540

27 NTPC Power 532555

28 DLF Real estate 532868

29 Bajaj Auto Automotive 532977

30 Coal India Metals and Mining 533278

Some of the historical replacements were:

DLF replaced Dr. Reddy's Lab on November 19,

2007.
http://en.wikipedia.org/wiki/Wiprohttp://en.wikipedia.org/wiki/Wiprohttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=507685http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=507685http://en.wikipedia.org/wiki/Sun_Pharmaceuticalhttp://en.wikipedia.org/wiki/Sun_Pharmaceuticalhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=524715http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=524715http://en.wikipedia.org/wiki/GAILhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532155http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532155http://en.wikipedia.org/wiki/ICICI_Bankhttp://en.wikipedia.org/wiki/ICICI_Bankhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532174http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532174http://en.wikipedia.org/wiki/Jindal_Steel_%26_Powerhttp://en.wikipedia.org/wiki/Jindal_Steel_%26_Powerhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532286http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532286http://en.wikipedia.org/wiki/Bharti_Airtelhttp://en.wikipedia.org/wiki/Bharti_Airtelhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532454http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532454http://en.wikipedia.org/wiki/Maruti_Suzukihttp://en.wikipedia.org/wiki/Maruti_Suzukihttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532500http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532500http://en.wikipedia.org/wiki/Tata_Consultancy_Serviceshttp://en.wikipedia.org/wiki/Tata_Consultancy_Serviceshttp://en.wikipedia.org/wiki/Tata_Consultancy_Serviceshttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532540http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532540http://en.wikipedia.org/wiki/NTPC_Limitedhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532555http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532555http://en.wikipedia.org/wiki/DLF_Limitedhttp://en.wikipedia.org/wiki/DLF_Limitedhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532868http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532868http://en.wikipedia.org/wiki/Bajaj_Autohttp://en.wikipedia.org/wiki/Bajaj_Autohttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532977http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532977http://en.wikipedia.org/wiki/Coal_Indiahttp://en.wikipedia.org/wiki/Coal_Indiahttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=533278http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=533278http://en.wikipedia.org/wiki/Dr._Reddy%27s_Laboratorieshttp://en.wikipedia.org/wiki/Dr._Reddy%27s_Laboratorieshttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=533278http://en.wikipedia.org/wiki/Coal_Indiahttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532977http://en.wikipedia.org/wiki/Bajaj_Autohttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532868http://en.wikipedia.org/wiki/DLF_Limitedhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532555http://en.wikipedia.org/wiki/NTPC_Limitedhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532540http://en.wikipedia.org/wiki/Tata_Consultancy_Serviceshttp://en.wikipedia.org/wiki/Tata_Consultancy_Serviceshttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532500http://en.wikipedia.org/wiki/Maruti_Suzukihttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532454http://en.wikipedia.org/wiki/Bharti_Airtelhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532286http://en.wikipedia.org/wiki/Jindal_Steel_%26_Powerhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532174http://en.wikipedia.org/wiki/ICICI_Bankhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532155http://en.wikipedia.org/wiki/GAILhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=524715http://en.wikipedia.org/wiki/Sun_Pharmaceuticalhttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=507685http://en.wikipedia.org/wiki/Wipro


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Jaiprakash Associates Ltd replaced Bajaj Auto Ltd on

March 14, 2008.

Sterlite Industries replaced Ambuja Cements on July

28, 2008. Tata Power Company replaced Cipla Ltd. on July 28,

2008.

Sun Pharmaceutical Industries replaced Satyam

Computer Services on January 8, 2009

Hero Honda Motors Ltd. replaced Ranbaxy on June

29, 2009 Cipla to replace Sun Pharma from May 3, 2010

Grasim replaced JSPL in 2010

Bajaj Auto replaced ACC from Dec 6th, 2010

Coal India replaced Reliance Infrastructure and Sun

Pharmaceutical replaced Reliance Communications

from Aug 8th, 2011 .

Milestones
http://en.wikipedia.org/wiki/Bajaj_Autohttp://en.wikipedia.org/wiki/Ambuja_Cementshttp://en.wikipedia.org/wiki/Satyam_Computer_Serviceshttp://en.wikipedia.org/wiki/Satyam_Computer_Serviceshttp://en.wikipedia.org/wiki/Ranbaxyhttp://en.wikipedia.org/wiki/Sun_Pharmaceuticalhttp://en.wikipedia.org/wiki/Jindal_Steel_and_Powerhttp://en.wikipedia.org/wiki/ACC_Limitedhttp://en.wikipedia.org/wiki/Reliance_Infrastructurehttp://en.wikipedia.org/wiki/Reliance_Communicationshttp://en.wikipedia.org/wiki/File:SENSEX_graph.pnghttp://en.wikipedia.org/wiki/File:SENSEX_graph.pnghttp://en.wikipedia.org/wiki/File:SENSEX_graph.pnghttp://en.wikipedia.org/wiki/File:SENSEX_graph.pnghttp://en.wikipedia.org/wiki/Reliance_Communicationshttp://en.wikipedia.org/wiki/Reliance_Infrastructurehttp://en.wikipedia.org/wiki/ACC_Limitedhttp://en.wikipedia.org/wiki/Jindal_Steel_and_Powerhttp://en.wikipedia.org/wiki/Sun_Pharmaceuticalhttp://en.wikipedia.org/wiki/Ranbaxyhttp://en.wikipedia.org/wiki/Satyam_Computer_Serviceshttp://en.wikipedia.org/wiki/Satyam_Computer_Serviceshttp://en.wikipedia.org/wiki/Ambuja_Cementshttp://en.wikipedia.org/wiki/Bajaj_Auto


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The graph of SENSEX from July 1997 to March 2011

Here is a timeline on the 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 2,020followed by the liberal economic policy initiatives

undertaken by the then finance minister and current

Prime Minister DrManmohan 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 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 Bharatiya
http://en.wikipedia.org/wiki/Manmohan_Singhhttp://en.wikipedia.org/wiki/Harshad_Mehtahttp://en.wikipedia.org/wiki/Bharatiya_Janata_Partyhttp://en.wikipedia.org/wiki/Bharatiya_Janata_Partyhttp://en.wikipedia.org/wiki/Harshad_Mehtahttp://en.wikipedia.org/wiki/Manmohan_Singh


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Janata Party-led coalition won the majority in the 13th

Lok Sabha election.

6000, February 11, 2000 - On February 11, 2000, theinformation technology 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 ofRIL, RelianceEnergy, 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 levelfollowing brisk buying by foreign and domestic funds

in early trading.

9000, December 9, 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 byforeign institutional investors and well supported by

local operators as well as retail investors.
http://en.wikipedia.org/wiki/Bharatiya_Janata_Partyhttp://en.wikipedia.org/wiki/Lok_Sabhahttp://en.wikipedia.org/wiki/Dhirubhai_Ambani#Reliance_after_Dhirubhaihttp://en.wikipedia.org/wiki/Reliance_Industrieshttp://en.wikipedia.org/wiki/Reliance_Energyhttp://en.wikipedia.org/wiki/Reliance_Energyhttp://en.wikipedia.org/wiki/Reliance_Capitalhttp://en.wikipedia.org/wiki/Indian_Petrochemicals_Corporation_Limitedhttp://en.wikipedia.org/wiki/Indian_Petrochemicals_Corporation_Limitedhttp://en.wikipedia.org/wiki/Reliance_Capitalhttp://en.wikipedia.org/wiki/Reliance_Energyhttp://en.wikipedia.org/wiki/Reliance_Energyhttp://en.wikipedia.org/wiki/Reliance_Industrieshttp://en.wikipedia.org/wiki/Dhirubhai_Ambani#Reliance_after_Dhirubhaihttp://en.wikipedia.org/wiki/Lok_Sabhahttp://en.wikipedia.org/wiki/Bharatiya_Janata_Party


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10,000, February 7, 2006 - The SENSEX on February

6, 2006 touched 10,003 points during mid-session.

The SENSEX finally closed above the 10,000-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


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


Exchange for the first time.

13,000, October 30, 2006 - The SENSEX on October30, 2006 crossed 13,000 for the first time. It touched a

peak of 13,039.36 and finally closed at 13,024.26.

14000, December 5, 2006 - The SENSEX on

December 5, 2006 crossed 14,000.

15,000, July 6, 2007 - The SENSEX on July 6, 2007crossed 15,000 mark.

16,000, September 19, 2007 - The SENSEX on

September 19, 2007 crossed the 16,000 mark.


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17,000, September 26, 2007 - The SENSEX on

September 26, 2007 crossed the 17,000 mark for the

first time.

18,000, October 9, 2007 - The SENSEX on October

9, 2007 crossed the 18,000 mark for the first time.





21,000, Jan 08, 2008 - The SENSEX on January 8,

2008 touched all time peak of 21078 before closing at

20873.[2]

November 5, 2010 - The SENSEX on November 5,

2010 closes at 20,893.6 with highest peak in twoyears.

Major crashes since 2000

May 2006

On May 22, 2006, the SENSEX plunged by 1100 points

during intra-day trading, leading to the suspension oftrading for the first time since May 17, 2004. The volatility

of the SENSEX had caused investors to lose Rs 6 lakh

crore (US$131 billion) within seven trading sessions. The
http://en.wikipedia.org/wiki/BSE_SENSEX#cite_note-1http://en.wikipedia.org/w/index.php?title=Intra-day_trading&action=edit&redlink=1http://en.wikipedia.org/wiki/Lakhhttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Lakhhttp://en.wikipedia.org/w/index.php?title=Intra-day_trading&action=edit&redlink=1http://en.wikipedia.org/wiki/BSE_SENSEX#cite_note-1


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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 retailinvestors 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, andon 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.

13,000, October 30, 2006 - The SENSEX on October30, 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 October 30, 2006 it

touched a peak of 13,039.36 & closed at 13,024.26.

14,000, December 5, 2006 - The SENSEX onDecember 5, 2006 crossed 14,000 and touched a

peak of 14028 at 9.58AM(IST) while opening for the

day December 5, 2006.
http://en.wikipedia.org/wiki/P._Chidambaramhttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Securities_and_Exchange_Board_of_Indiahttp://en.wikipedia.org/wiki/Securities_and_Exchange_Board_of_Indiahttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/P._Chidambaram


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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 miles

May 2009

On May 18, 2009, the SENSEX surged 2110.79 points

from the previous closing of 12174.42 this leading to the

suspension of trade for the whole day.This event created

history in Dalal Street, by being the first ever time that

trade had been suspended for an increase in value. This

rally is primarily due to the victory of the UPA in the 15th

General elections. Trading was open for that day only for

55 seconds. Initially 25 seconds and 30 seconds market

reached upper freeze limit twice in that day itself.

Effects of the subprime mortgage crisis in the U.S

On Monday July 23, 2007, the SENSEX touched a new

height of 15,733 points. On July 27, 2007 the SENSEX

witnessed a huge correction because of selling by foreign

institutional investors (FIIs) 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 Wednesday August 1,2007.

16,000, September 19, 2007- The SENSEX on

September 19, 2007 crossed the 16,000 mark and
http://en.wikipedia.org/wiki/Institutional_investorhttp://en.wikipedia.org/wiki/Institutional_investor


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reached a historic peak of 16322 while closing. The

bull hits because of the rate cut of 50 bit/s in the

discount rate by the Fed chiefBen Bernanke on

September 26, 2007 crossed the 17,000 mark for thefirst 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 256points. 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. Thejourney 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 October 9 was the

second biggest single day absolute gains.

19,000, October 15, 2007- The SENSEX crossed the19k mark for the first time on October 15, 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
http://en.wikipedia.org/wiki/Ben_Bernankehttp://en.wikipedia.org/wiki/Ben_Bernanke


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absolute terms. This made it a record 3000 point rally

in 17 trading sessions overall.

Participatory notes issueOn October 16, 2007, SEBI (Securities & Exchange Board

of India) proposed curbs on participatory notes which

accounted for roughly 50% ofFII 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 MinisterP. 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 lastday's close.

This was, however not the end of the volatility. The next

day (October 18, 2007), the SENSEX tumbled by 717.43
http://en.wikipedia.org/wiki/SEBIhttp://en.wikipedia.org/wiki/Participatory_noteshttp://en.wikipedia.org/wiki/Foreign_Institutional_Investorhttp://en.wikipedia.org/wiki/P._Chidambaramhttp://en.wikipedia.org/wiki/P._Chidambaramhttp://en.wikipedia.org/wiki/Foreign_Institutional_Investorhttp://en.wikipedia.org/wiki/Participatory_noteshttp://en.wikipedia.org/wiki/SEBI


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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 duringthe day.

After detailed clarifications from the SEBI chiefM.

Damodaran regarding the new rules, the market made a

879-point gain on October 23, thus signalling the end of

the PN crisis.

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

January 2008

In the third week of January 2008, the SENSEXexperienced huge falls along with other markets around

the world. On January 21, 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
http://en.wikipedia.org/wiki/M._Damodaranhttp://en.wikipedia.org/wiki/M._Damodaranhttp://www.business-standard.com/common/storypage_c_online.php?leftnm=10&bKeyFlag=IN&autono=32206http://www.business-standard.com/common/storypage_c_online.php?leftnm=10&bKeyFlag=IN&autono=32206http://en.wikipedia.org/wiki/M._Damodaranhttp://en.wikipedia.org/wiki/M._Damodaran


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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 bouncedback to close at 16,730 with a loss of 875 points.[3]

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%.[3]

9,975, October 17, 2008 - SENSEX crashes below

the psychological 5 figure mark of 10K, followingextremely negative global financial indications in US

and other countries. Exactly one year back in October

2007, SENSEX had gone past the 20K mark.

8701.07, October 24, 2008 lost 10.96% of its value on

the intra day trade, the 3rd highest loss for a one day

period in its history

Major falls

Some major single-day falls of the SENSEX haveoccurred on the following dates:[6]
http://en.wikipedia.org/wiki/Indian_Standard_Timehttp://en.wikipedia.org/wiki/Finance_Minister_of_Indiahttp://en.wikipedia.org/wiki/BSE_SENSEX#cite_note-rediff-2http://en.wikipedia.org/wiki/BSE_SENSEX#cite_note-rediff-2http://en.wikipedia.org/wiki/BSE_SENSEX#cite_note-5http://en.wikipedia.org/wiki/BSE_SENSEX#cite_note-5http://en.wikipedia.org/wiki/BSE_SENSEX#cite_note-rediff-2http://en.wikipedia.org/wiki/BSE_SENSEX#cite_note-rediff-2http://en.wikipedia.org/wiki/Finance_Minister_of_Indiahttp://en.wikipedia.org/wiki/Indian_Standard_Time


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1. January 21, 2008 --- 1,408.35 points2. Oct 24, 2008---1070.63 points3. March 17, 2008 --- 951.03 points

4. July 6, 2009 --- 870 points5. January 22, 2008 --- 857 points6. February 11, 2008 --- 833.98 points7. May 18, 2006 --- 826 points8. October 10, 2008 --- 800.10 points9. March 13, 2008 --- 770.63 points10. December 17, 2007 --- 769.48 points11. January 7, 2009 --- 749.05 points

12. March 31, 2007 --- 726.85 points13. October 6, 2008 --- 724.62 points14. October 17, 2007 --- 717.43 points15. September 15, 2008 --- 710.00 points16. September 22, 2011 --- 704.00 points17. January 18, 2007 --- 687.82 points18. November 21, 2007 --- 678.18 points

19. August 16, 2007 --- 642.70 points20. August 17, 2009 --- 626.71 points21. June 27, 2008 --- 600.00 points22. February 24, 2011 --- 545.92 points23. February 27, 2012 --- 477.82 points24. November 16, 2010 --- 444.55 Points25. February 4, 2011 --- 441.92 Points26. November 12, 2010 --- 432 Points


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Conclusion

S&P CNX Nifty and Sensex are based on propercalculation which show actual movement of market as itcomprises those stocks which has more shares trading inthe market.

If the Sensex goes up, it means that the prices of thestocks of most of the major companies on the BSE havegone up. If the Sensex goes down, this tells you that the

stock price of most of the major stocks on the BSE havegone down.

Just like the Sensex represents the top stocks of the BSE,the Nifty represents the top stocks of the NSE.

As the selection of a stock in sensex and nifty is adhere to

specific way which gives a true and fair position of market.It gives idea to the investor that whether the market isbullish or bearish.

By getting idea about it, one thing is affirmed that there isno precised way which will give that whether stock pricewill increase or decrease, it alll based on assumption andcalculation. It is somewhat a prediction.


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BIBLIOGRAPHY/REFERENCES

"http://en.wikipedia.org/w/index.php?title=BSE_SENSEX&oldidand nifty =512556001"

BSE Sensex". Bseindia.com. 2003-09-01. Andwww.nseindia.comhttp://www.bseindia.com/about/abindices/bse30.asp. Retrieved2012-02-19.

Sensex hits 21,000; ends up 61 points - Rediff.com Business".In.rediff.com. 2008-01-08.http://in.rediff.com/money/2008/jan/08sensex.htm. Retrieved2011-09-19.

Business Bureau (2008-01-21). "The 10 biggest falls inSENSEX history". MarketWatch.http://www.rediff.com/money/2008/jan/21spec1.htm. Retrieved2008-01-23.

What are P-Notes?". October 17, 2007.http://www.rediff.com/money/2007/oct/17spec.htm. RetrievedFebruary 21, 2011.

Vaidyanathan, R. (Oct 24, 2007). "Why Participatory Notes aredangerous". The Hindu.http://www.thehindubusinessline.in/2007/10/24/stories/2007102450800800.htm. Retrieved February 22, 2011.

The Hindu News Update Service". Hindu.com.http://www.hindu.com/thehindu/holnus/001200801221826.htm.Retrieved 2011-09-19.
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