Stock market indices. Introduction . Stock market indices are the barometers of the stock market. They mirror the stock market behavior. With some 7000 companies listed on BSE, it is not possible to look at the prices of every stock to find out whether the market movement is upward or downward.
Sensex, NIFTY, BSE-200, CRISIL-500
Technical analysis studying the historical performance of the indices predict the future movement of the stock market. Te relationship between the individual stock and index predicts the individual share price movement.
The continuity and integrity of index are kept intact, so that a comparison of the current market conditions with those of decade ago is made easy and any distortion in the market analysis is avoided. The quantitative and qualitative criteria adopted in the selection of 30 scrips are listed.
(III) Market capitalisation
Industry representation: the company’s scrip should reflect the present state of the industry and its future prospects. Companies should be representative of industry
Market capitalisation: the scrip should be among top 100 companies listed by full market capitalisation. The weight of each Sensex scrip based on free float should be at least 0.5% of the index. Market capitalisation should be average for last six months.