Sensx

Based on the performance of 30 companies, the Sensex is measured, it represents the true measure. Why and how only the performance of 30 companies taken for calculating the Sensex and maybe 50 companies to adapt and NSE.

The main criteria for selection of 30 titles is as follows:

Market capitalization: The company must have a market capitalization in the Top 100 market capitalization of BSE. In addition, the market capitalization of each company should be more than 0.5% of the total market capitalization of the index.

Valuation: The company must be included have been traded on each trading day for the duration of one year. Exceptions may be made for extreme reasons like Share suspension, etc.

Number of transactions: The certificates must be among the top 150 companies listed on the average number of transactions per day for the last year.

Industry representation: The companies must be leaders in their group.

Now, the question of why only 30 companies, why not all?
The answer is here.Actually, according to the criteria mentioned above u can easily make out that these 30 companies to be the main market of the CAP holders.So, they are able to cover more than 90% of the action as values.Also the
from other companies is very minor, stability or instability does not have a significant impact on these companies share sensex.Also minor "are not traded on regular basis and certainly nothing can be said about their existence in the equity market. Thus, it is not logical to include all companies trading in Sensex calculation.Even watching just those 30 majors, one can easily find the behavior of market shares and calculate " free float market capitalization (the total current value of investment in market share in value terms of Rs), which comes to be very close to the exact value.
I hope the things I explained to some extent.

It represents the true measure that consists of 30 companies across sectors and companies are the blue chips in these sectors. NSE has its own standard and then took 50 scripts, but if you see both move in tandom of 3 to 3.5 points move in the BSE for 1 point move in the NSE.

Thank you,
srikanth
http://indianstockmarketscomment.blogspot.com

I congratulate you for this beautiful question.

Since the index is the measure of the quality or the quality of the brand share for classification as not all companies are equal on the market potential index to either select few companies. You can find the methods for selecting the actions of the index and it continues to change and stocks are not fixed.
Thus, the index is nothing but a study of some selected shares and on this basis the economic analysis while others were made.