How to understand in simple terms.
thank you
BSE - is Bombay Stock Exchange
Sensex - is the index by which we measure the stock market (BSE) valuation
16,855.51 - in the value of the index
0.26% - is the value by which the sensex has gone up or down as compared to the previous trading day index
What are stock index like sensex & nifty?.
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Sensex & Nifty are nothing but 'Stock Index' which can make a common man know whether the market ig going up or going down.
Stock Indexes are just numbers that helps to measure the movement of market against a benchmark index, taken as 100, on a base year. Sensex is a stock Index for Bombay stock exchange (BSE) and Nifty if of National Stock Exchange (NSE).
Stock Index is calculated daily. The calculation is done by tracking the share price of constituent member companies. For Example, Sensex is an index comprising of 3o representing shares. These 30 shares represent all the balance shares normally traded in the market. Nifty has 50 representing shares.
The base date for Sensex is 1st April 1979 and for Nifty is 1st April 1995. This means that the sensex & Nifty were assumed to be 100 on their base dates.
The steps involved in calculation of index is as follows:
* CALCULATE MARKET CAPITALIZATION OF EACH REPRESENTING COMPANIES - If company has total 150 shares and out of these 150, 100 nos are owned by investors. Now suppose the closing price of share was Rs.20 on a trading day, then its market capitalization on that trading day will be 100 X 20 = Rs 2000.
* CALCULATE TOTAL MARKET CAPITALIZATION - by adding maket capitalization of all representing companies / shares. Suppose this value is Rs 1,00,000.
* COMPUTE THE INDEX -
Thus the index of current trading comes out to be 8,888 as compared to the revious day figure of 8,000. This indicates the current day capitalization has been more than the previous. The capitalization increases means either the numbers of shares held by the investors has increased, or the market value of shares have risen or both.
The 16855.51 is the current index value and 0.26% is the percentage it is up from the yesterday's closing value, when there is no + or - sign before the percentage value it is assumed as + hence at this time the index is up by 0.26% by yesterday's closing and if it is -0.26% then the index is down from yesterday's closing.
Every Index calculate on last day closing value. So, the last trading session closing value is 16811.79 or 16899.44. Today during trading session it increase 43.72 point or decrease 43.93. So the change in percentage is 0.26%.