Stock Exchange index

Stock Exchange index

Subject : Economy

Context:

Market watchers say Samvat 2078 (last Diwali to this)  has been tough for Financial markets as the Sensex declined 0.96 per cent, while the broader Nifty index fell 1.48 per cent.

Details:

• It is the beginning of Samvat 2079 next week.
• Causes of down performance:
  • Omicron wave– which reduced expected profit decline
  • Russia Ukraine war –again marginal efficiency of capital investment declined.
  • War induced inflation–reduce demand of financial assets
  • Federal monetary policy tightening–large scale capital outflows

Concept:

By the Hindu calendar, the lunisolar Vikram Samvat calendar is 56.7 years ahead of the solar Gregorian calendar.

The National Stock Exchange and the Nifty Index

• It was founded in 1992.
• It was recognized as a stock exchange by SEBI under the Securities Contracts (Regulation) Act, 1956 and the operation commenced in 1994.
• It was the first exchange in India to provide fully computerized electronic trading.
• NSE is one of the pioneers in technology and innovation which ensured the high-end performance of its systems. The exchange supports more than 3,000 VSAT terminals, making the NSE the largest private wide-area network in the country. NSE is the largest stock market, in terms of volume in India.
• The NIFTY 50 is the flagship index on the National Stock Exchange of India Ltd. (NSE).
  • The Index tracks the behavior of a portfolio of blue chip companies, the largest and most liquid Indian securities. It includes 50 of the approximately 1600 companies listed on the NSE.

The Bombay Stock Exchange and Sensex:

• It was founded on July 9, 1875.
• It is Asia’s first stock exchange and  world’s fastest exchange with a median trade speed of six microseconds.
• BSE Sensex the benchmark index of India’s BSE, formerly known as the Bombay Stock Exchange.
  • It comprises the 30 of the largest and most actively-traded stocks on the BSE, providing a gauge of India’s economy.
  • Sensex uses a weighted average method for price movement calculation. That means each share’s price has a weightage proportional to its market capitalization.
  • The index’s composition is reviewed in June and December each year.
  • Five criteria for being listed in BSE Sensex:
    • It should be listed in India on BSE
    • It should be a large-to mega-cap company
    • The stock should be relatively liquid
    • The company should generate revenue from core activities
    • It should keep the sector balanced broadly in line with the Indian equity market.