HOW TO CALCULATE SENSEX POINT?

SENSEX is calculated on the basis of free float market capitalization (30 stock)by taking base year 100(1978-19879).  Free float market capitalization is define as the the value of all the share available for public trading excluding,FDI holding, employee holdings(employee welfare fund), private corporate,the promoter equity.

How 30 stock is selected.

       

       Listing history

       Trading volume

             Market caplization(No of outstanding share * market price)

             Weight in sensex

              Sector etc

Formula:

SENSEX=Sum of free float market cap of 30 benchmark stock * Index factor

Index Factor= 100/Market Cap Value in 1978-79

100 is the index value of 1978-79

Let us assume SENSEX has only 2 stocks namely TATA STEEL and  AIRTEL.Total share in TATA STEEL share 600 out of which 200 are held by promoter and only 400 are available for pulic trading . AIRTEL has 1000 shares out of which 500 are held by promoterd and 500 are available for trading . Assume price of AIRTEL stock is Rs150 and TATA STELL is Rs 300 then free-floating market cap of these 2 companes.

(400*300+500*150)=1,20,000+75,000=1,95,000

 Sensex = 1,95,000*100/30,000=650

Let assume market cap. during 1978-79 was 30,000

Same technique is applied to measure sensex but difference is -instated of 2 stock we take 30 stock for sensex.

Source-http://www.bseindia.com/about/abindices/bse30.asp