October 12, 2020 Update: Indian stocks as measured by the BSE Sensex were slightly higher at the end of closing on Monday as tech stocks gained more than bank stocks lost. Bank stocks were struck by fiscal stimulus measures, which came up short of what the market had expected. Reuters also reports that Mumbai’s financial hub was hit by a massive power outage due to a major grid failure.
The BSE Sensex reclaimed the 40,000 level on Monday, which was its eighth consecutive day of rallying. Vishal Wagh of Bonanza Portfolio told Moneycontrol that Indian stock indices, especially the Nifty 50, are in overbought territory, especially over the last 10 trading sessions. The BSE Sensex is close to wiping away the losses it has seen this year as investors look favorably on India’s plans to reopen its economy.
The index hit its lowest level in more than two months on Sept. 24, but it has since rallied by nearly 11%. It’s among the best-performing stock indices, according to Bloomberg data.
BSE Sensex climbs on Reliance Industries rally, border talks
September 10, 2020 Update: The BSE Sensex climbed more than 600 points today as Indian stocks climbed higher and closed in the green following several trading sessions of consolidation. The index climbed 1.69% to close at 38,840.32.
The main driver of the rally in Indian stocks is Reliance Industries, India’s biggest listed company by market capitalization. The stock climbed more than 7% to a record high of Rs2,343.90. Private equity firm Silver Lake Partners plans to invest Rs7,500 crore in the company’s retail unit.
Other factors affecting the BSE Sensex today include the talks between India and China over their shared border. Indian officials will meet with their Chinese counterparts today amid the standoff over the Line of Actual Control in eastern Ladakh.
S&P BSE Sensex: Your quick guide to India’s bellwether index
Until the COVID-19 pandemic crippled the global economy, India was among the world’s fastest growing large economies. The index that provides an accurate gauge of India’s economic health is the S&P BSE Sensex. Let’s find out what it is and how it works.
The Bombay Stock Exchange (BSE) was the first stock exchange in Asia. It was established in Mumbai as the Native Share and Stock Brokers’ Association in 1875. There are about 5,500 stocks listed on the exchange. But most of them are small-cap stocks. The combined market capitalization of all companies listed on the BSE was $794 billion as of May 21, 2020.
What is BSE Sensex?
The overall performance of the Bombay Stock Exchange (BSE) is measured by the S&P BSE Sensex. The term Sensex was derived from Sensitive Index in 1989. Sensex is the most-tracked stock market index in India. It was first published in January 1986 with the base value of 100. Its base year is 1978-79.
The S&P BSE Sensex is a free-float market cap-weighted index of 30 of the largest and most actively traded stocks listed on the Bombay Stock Exchange. Investors and analysts closely monitor the Sensex because it reflects overall health of the Indian economy. In July 2001, the Bombay Stock Exchange launched DOLLEX 30, a US dollar-denominated version of the Sensex.
The Sensex has delivered an annualized return of 13.68% since its inception in 1986. However, the returns of dollar-denominated DOLLEX-30 could be much lower due to the depreciation in Indian Rupee over the last couple of decades.
Some of the largest constituents of the index are Reliance Industries, HDFC Bank, HDFC, ICICI Bank, Infosys, ITC, Kotak Mahindra Bank, and Tata Consultancy Services.
How to invest
The American Depository Receipts (ADRs) of several BSE Sensex constituents are listed in the US. They include HDFC Bank, ICICI Bank and Infosys. But if you want to have greater exposure to Sensex, you can invest through India-focused exchange traded funds (ETFs).
The most popular India-focused ETFs trading in the US are the iShares MSCI India ETF (INDA), WisdomTree India Earnings Fund (EPI), and iShares India 50 ETF (INDY).
It’s easier for the foreign institutional investors (FIIs) than retail investors to invest in Indian markets. India doesn’t allow foreign individual investors to invest directly in the Indian markets. But high net-worth individuals can register themselves as a sub-account of an institutional investor to invest in the country.