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The benchmark BSE Sensex achieved an extraordinary achievement by climbing above 50,000 points for the first time ever. It is a momentous day for nation’s capital markets. The coronavirus- triggered lockdowns pulled the Sensex to record low in late March. However, it staged a retrieval from the lows. Both the BSE and NSE indices eventually closed 2020 on a bullish note with the Sensex obtaining around 16 percent. The increase of last 5,000 points came in just32 trading sessions. The increase in the index has been triggered by foreign buying, with overseas investors putting $2.6 billion into Indian equities in January. MEANING OF SENSEX
For an investor it is very crucial to know the basic terms like meaning of Sensex, how its calculation is done.
The term Sensex was coined by a financial analyst Mr. Deepak Mohoni, the word is a blend of Sensitive and Index. The Sensex is basically an index which contains the Bombay Stock Exchange (BSE) which was established in 1875. The stock exchange was not having any official index till January 1, 1986. At that time Sensex was picked for determining the performance of the Indian market. The Sensex contains of 30 prominent stocks which arose from sectors and are traded steadily in the exchange market. Sensex accurately shows the Indian stock market movement. If the value of Sensex increases it means that there is a extensive increase in the prices of shares as well although, if the Sensex decreases it means there is a widedecrease in the price of shares.
You can spot the ups and downs going in the stock market through S&P BSE Sensex. BSE and S&P Dow Jones Indices, entered into an alliance to measure Sensex from Feb 19, 2013. Nifty is the additional index calculated in India for the National Stock Exchange.Sensex contains ofthe 30 largest and most busily traded stocks on BSE, providing a meter of India’s economy. The Sensex is one of the oldster stockindexes in our nation. It is used to notice the general growth, development of specific industries, booms and busts of the Indian economy by the investors
SENSEX’S ROLLER COASTER JOURNEY
The Sensex has journeyed from 100 points to close at a level of 50,000 on 21 January, 2021. There were periods of extraordinary strong growth and some periods of consolidation and creeping. The Sensex crossed the 1,000 mark in 1990 after 11 years, however it breached the next 3,000 points in less than a year. The Harshad Mehta scam affected the market in this time period but it also led to remarkable market reforms and improvements in trading and settlement. The economy too observed the first wave of reforms with liberalization of the investment and trade regimes encouraging greater competition and regulation.
It took seven years for the Sensex to reach from 4,000 to 5,000 and was reached in 1999. The period also witnessed knowledge-basedsectors such as information technology taking public-eye and stocks like Infosys Ltd and TCS Ltd progressively replacing the old economy stocks as the most followed and observed components of the Sensex. In 2006, the Sensex crossed the 10,000 mark as a Chinese-led commodity explosion saw a re-form in global markets. The Sensex reached 20,000 points in December 2007 driven by global liquidity. The sub-prime dilemma hit world markets in early 2008, the Sensex had lost 64% of its value to drop to 8,500 points.
Over the next five years, the market consolidated and grew sharplyand progressively on the back of a retrieving Indian economy and a second round of reforms and improvements in 2012.
A second win of the Narendra Modi-led BJP, raised the Sensex over the 40,000 landmark for the first time ever. Captivatingly, the Sensex almost doubled since Modi came to power in 2014.
From observing enormous losses to ground-breaking gains, investors faced crests and troughs amid the Covid-19 pandemic and huge incitement during the year 2020. The Covid-19 pandemic made the government to announce a nationwide lockdown to stop it from spreading. As the number of cases increased, massive global selloff drovethe Sensex off a cliff in late March 2020. Nevertheless, markets mounted a huge comeback and jumped around 91 per cent in just over 10 months to breach the 50,000 points. CONCLUSION
India’s per capita income has observed a constant increase since the 1990s. Nevertheless, the economy moves more slowly and hasn’t keep up with the rise of Sensex. Even when the economy is witnessing its worst phase in almost 40 years, the Sensex has continued to break the records. Finally, it breached the enormous level of 50,000.