Bse sensex and macro economic factors affecting Categories Free Essays Tags In many ways it is the barometer through which the economy of a country is perceived by many people even though there are other economic tools to judge the actual health of the economy. Stock exchanges are places through which the public at large take part as investors. Worldwide, there are millions of transactions that take place every day.
It is one of the prominent stock market indexes in India.
The Sensex is designed to reflect the overall market sentiments. It comprises of 30 stocks. These are large, well-established and financially sound companies from main sectors. Larger the size, higher the weightage. The base year of Sensex is and the base index value is set to for that period.
This is for the purpose of ease of calculation and to logically represent the change in terms of percentage.
The stocks are selected based on a lot of qualitative and quantitative criterias. You can view the listing criteria here. The construction technique of index is quite easy to understand if we assume that there is only one stock in the market.
As our second step to understand the index calculation, let us try to extend the same logic to two stocks — A and B. Since the Sensex follows the market capitalization weighted method, we have to find the market capitalization or size of the company- in terms of price of the two companies and proportionate weightage will have to be given in the calculation.
How do we compute size of the company- in terms of price? Just multiply the total number of shares of the company by the market price. Back to our example- We assume that company A hasshares outstanding and B hasshares outstanding. This will be equivalent to points.
The market capitalization will have to be reworked. Hence, the index would move from to to indicate the net effect. What we said was the general method to construct indices.
What is free float? It excludes shares held by promoters, governments or trusts, FDIs etc. To find the free float market value, the total value of the company total shares x market price is further multiplied by a free float market value factor, which is nothing but the percentage of free float shares of a particular company.
So logically, the company which has more public holding will have the highest free float factor in the Sensex.
The index divisor nothing but the present level of index. So, now, we have all the figures. At that point, the Sensex is at What would be the value of Sensex if the free-float market capitalization is Rs 11,50, Crore?
The answer is 14,macroeconomic factors and stock market performance in India. Studies of Bhattacharya and Mukherjee (), Nath and Samantha () found the causal relationship between stock prices and macro-economic factors in India. They applied methodology of Toda .
Inflation & BSE sensex annual return from to As we can see the sensex return Understanding how macro economic factors impact equity returns;. Stock Market Performance and Macroeconomic Factors: and Mohammad et al. () investigate the role of macro- economic factors, BSE Sensex and macroeconomic.
The economy of India is a developing mixed economy. It is the world's sixth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP). The country ranks th in per capita GDP (nominal) with $2, and nd in per capita GDP (PPP) with $7, as of After the economic liberalisation, India achieved % average GDP growth annually.
Indian share market trading and investment tips by Edelweiss help you get better at trading. Visit us for today's Investment Tips! Not only Nifty but also Sensex ended at record closing high of 36,, up points. Even the entire July series was strong for the market as the Nifty and Sensex rallied percent each.