Sensex
Also called: BSE Sensex
The BSE's index of 30 large Indian companies, weighted by free-float market cap. India's oldest benchmark, published since 1986.
The Sensex measures the combined value of 30 large companies listed on the BSE. Its base year is 1978-79, set at 100, so a reading of 80,000 means the basket is worth 800 times what a similar basket was worth then, before counting dividends.
Each company counts in proportion to its free-float market cap, so a few heavyweights (the big banks, Reliance Industries, the large IT firms) move the index much more than the rest. The list of members is reviewed twice a year.
Example
The Sensex falls 400 points from 80,000. Divide the points by the level: 400 divided by 80,000 is half a percent, an ordinary day. The same 400 points in 2006, with the Sensex near 10,000, would have been a four percent fall.
Watch out
You cannot buy the Sensex itself. An index fund or ETF that copies it gets you very close, minus a small fee.
Learn it properly in
Chapter 1.2: Sensex and Nifty: what the two numbers on the news actually measure