The BSE Sensex or Bombay Stock Exchange Sensitive Index is a value-weighted index composed of 30 stocks with the base April 1979 = 100. It consists of the 30 largest and most actively traded stocks, representative of various sectors, on the Bombay Stock Exchange. These companies account for around one-fifth of the market capitalization of the BSE.

 

The base value of the Sensex is 100 on April 1, 1979 and the base year of BSE-SENSEX is 1978-79.

 

At irregular intervals, the Bombay Stock Exchange (BSE) authorities review and modify its composition to make sure it reflects current market conditions.

 

The abbreviated form "Sensex" was coined by Deepak Mohoni around 1990 while writing market analysis columns for some of the business newspapers and magazines. It gained popularity over the next year or two.

 

The index has increased by over ten times from June 1990 to today. Using information from April 1979 onwards, the long-run rate of return on the BSE Sensex can be estimated to be 0.52% per week (continuously compounded) with a standard deviation of 3.67%. This translates to 27% per annum, which translates to roughly 18% per annum after compensating for inflation.

 

SENSEX MILESTONES

 

Here is a timeline on the rise and rise of the Sensex through Indian stock market history.

 

1000, July 25, 1990 - On July 25, 1990, the Sensex touched the four-digit figure for the first time and closed at 1,001 in the wake of a good monsoon and excellent corporate results.

 

2000, January 15, 1992 - On January 15, 1992, the Sensex crossed the 2,000-mark and closed at 2,020 followed by the liberal economic policy initiatives undertaken by the then finance minister and current Prime Minister Dr Manmohan Singh.

 

3000, February 29, 1992 - On February 29, 1992, the Sensex surged past the 3000 mark in the wake of the market-friendly Budget announced by the then Finance Minister, Dr Manmohan Singh.

 

4000, March 30, 1992 - On March 30, 1992, the Sensex crossed the 4,000-mark and closed at 4,091 on the expectations of a liberal export-import policy. It was then that the Harshad Mehta scam hit the markets and Sensex witnessed unabated selling.

 

5000, October 11, 1999 - On October 8, 1999, the Sensex crossed the 5,000-mark as the BJP-led coalition won the majority in the 13th Lok Sabha election.

 

6000, February 11, 2000 - On February 11, 2000, the infotech boom helped the Sensex to cross the 6,000-mark and hit and all time high of 6,006.

7000, June 21, 2005 - On June 20, 2005, the news of the settlement between the Ambani brothers boosted investor sentiments and the scrips of RIL, Reliance Energy, Reliance Capital and IPCL made huge gains. This helped the Sensex crossed 7,000 points for the first time.

 

8000, September 8, 2005 - On September 8, 2005, the Bombay Stock Exchange's benchmark 30-share index -- the Sensex -- crossed the 8000 level following brisk buying by foreign and domestic funds in early trading.

 

9000, December 09, 2005 - The Sensex on November 28, 2005 crossed 9000 to touch 9000.32 points during mid-session at the Bombay Stock Exchange on the back of frantic buying spree by foreign institutional investors and well supported by local operators as well as retail investors.

 

10,000, February 7, 2006 - The Sensex on February 6, 2006 touched 10,003 points during mid-session. The Sensex finally closed above the 10K-mark on February 7, 2006.

 

11,000, March 27, 2006 - The Sensex on March 21, 2006 crossed 11,000 and touched a life-time peak of 11,001 points during mid-session at the Bombay Stock Exchange for the first time. However, it was on March 27, 2006 that the Sensex first closed at over 11,000 points.

 

12,000, April 20, 2006 - The Sensex on April 20, 2006 crossed 12,000 and touched a life-time peak of 12,004 points during mid-session at the Bombay Stock Exchange for the first time.

 

13,000, October 30, 2006 - The Sensex on October 30, 2006 crossed 13,000 and still riding high at the Bombay Stock Exchange for the first time. It took 135 days to reach 13,000 from 12,000. And 124 days to reach 13,000 from 12,500. On 30th October 2006 it touched a peak of 13,039.36 & closed at 13,024.26.

 

14,000, December 5, 2006 - The Sensex on December 5, 2006 crossed 14,000 and touched a life-time peak of 14028 at 9.58AM(IST) while opening for the day December 5, 2006.

 

15,000, July 6, 2007- The Sensex on July 6, 2007 crossed another milestone and reached a magic figure of 15,000. it took almost 7 month and 1 day to touch such a historic milestone.

 

16,000, September 19, 2007- The Sensex on September 19, 2007 crossed the 16,000 mark and reached a historic peak of 16322 while cloasing. The bull hits because of the rate cut of 50 bps in the discount rate by the Fed chief Ben Bernanke in US.

 

17,000, September 26, 2007- The Sensex on September 26, 2007 crossed the 17,000 mark for the first time, creating a record for the fastest 1000 point gain in just 5 trading sessions. It failed however to sustain the momentum and closed below 17000. The Sensex closed above 17000 for the first time on the following day. Reliance group has been the main contributor in this bull run, contributing 256 points. This also helped Mukesh Ambani's net worth to grow to over $50 billion or Rs.2 trillion. It was also during this record bull run that the Sensex for the first time zoomed ahead of the Nikkei of Japan.

 

18,000, October 9, 2007- The Sensex crossed the 18k mark for the first time on October 9, 2007. The journey from 17k to 18k took just 8 trading sessions which is the third fastest 1000 point rise in the history of the sensex. The sensex closed at 18,280 at the end of day. This 788 point gain on 9th October is the biggest single day absolute gains ever. Sensex also saw intra-day gains of 1000 points from the day's lows in the backdrop of political uncertainty between the UPA and Left parties on the Nuke deal. The markets started coming off the day's lows on news that the immediate threat to the government had receded after the warring factions agreed to talk further. Reliance Industries was again the biggest contributor in this 1000 point gain. The Reliance-pack along with Infosys and L&T lead the bull run.

 

19,000, October 15, 2007- The Sensex crossed the 19k mark for the first time on October 15th 2007.It took just 4 days to reach from 18k to 19k. This is the fastest 1000 points rally ever and also the 640 point rally was the second highest single day rally in absolute terms. RIL contributed 153 pts, ICICI Bk 120 pts, ONGC 119 pts, L&T 108 pts and Bharti Airtel 96 pts. Top 5 stocks contributed 60% of rally from 18k to 19k. That means a record 3000 point rally in 17 trading sessions.

 

On May 22, 2006, the Sensex plunged by a whopping 1100 points during intra-dat trading, leading to the suspension of trading for the first time since May 17, 2004. The volatility of the Sensex had caused investors to lose Rs 6 lakh crore ($131 billion) within seven trading sessions. The Finance Minister of India, P. Chidambaram, made an unscheduled press statement when trading was suspended to assure investors that nothing was wrong with the fundamentals of the economy, and advised retail investors to stay invested. When trading resumed after the reassurances of the Reserve Bank of India and the Securities and Exchange Board of India, the Sensex managed to move up 700 points, still 450 points in the red. This is the largest ever intra-day crash (in points terms) in the history of the Sensex.

 

The Sensex eventually recovered from the volatility, and on October 16, 2006, the Sensex closed at an all-time high of 12,928.18 with an intra-day high of 12,953.76. This was a result of increased confidence in the economy and reports that India's manufacturing sector grew by 11.1% in August 2006.

 

On July 23, 2007, the Sensex touched a new high of 15,733 points. The index touched the 15,828.98 mark the very next day. On July 28, 2007 the Sensex witnessed a huge correction because of selling by Foreign Institutional Investors and global queues to come back to 15,160 points by noon.  Following global queues and heavy selling in the International markets, the BSE Sensex fell by 615 points in a single day on August 1, 2007, the third such biggest fall in its history.  Following the same trend, the BSE Sensex fell by 643 points in a single day on August 16, 2007, which is the biggest fall since April, 2007 and the second biggest ever (absloute terms) in history.

 

18,000, October 9, 2007- The Sensex crossed the 18k mark for the first time on October 9, 2007. The journey from 17k to 18k took just 8 trading sessions which is the third fastest 1000 point rise in the history of the sensex. The sensex closed at 18,280 at the end of day. This 788 point gain on 9th October is the biggest single day absolute gains ever. Sensex also saw intra-day gains of 1000 points from the day's lows in the backdrop of political uncertainty between the UPA and Left parties on the Nuke deal. The markets started coming off the day's lows on news that the immediate threat to the government had receded after the warring factions agreed to talk further. Reliance Industries was again the biggest contributor in this 1000 point gain. The Reliance-pack along with Infosys and L&T lead the bull run.

 

19,000, October 15, 2007- The Sensex crossed the 19k mark for the first time on October 15th 2007.It took just 4 days to reach from 18k to 19k. This is the fastest 1000 points rally ever and also the 640 point rally was the second highest single day rally in absolute terms. RIL contributed 153 pts, ICICI Bk 120 pts, ONGC 119 pts, L&T 108 pts and Bharti Airtel 96 pts. Top 5 stocks contributed 60% of rally from 18k to 19k. That means a record 3000 point rally in 17 trading sessions.

On May 22, 2006, the Sensex plunged by a whopping 1100 points during intra-day trading, leading to the suspension of trading for the first time since May 17, 2004. The volatility of the Sensex had caused investors to lose Rs 6 lakh crore ($131 billion) within seven trading sessions. The Finance Minister of India, P. Chidambaram, made an unscheduled press statement when trading was suspended to assure investors that nothing was wrong with the fundamentals of the economy, and advised retail investors to stay invested. When trading resumed after the reassurances of the Reserve Bank of India and the Securities and Exchange Board of India, the Sensex managed to move up 700 points, still 450 points in the red. This is the largest ever intra-day crash (in points terms) in the history of the Sensex.

 

The Sensex eventually recovered from the volatility, and on October 16, 2006, the Sensex closed at an all-time high of 12,928.18 with an intra-day high of 12,953.76. This was a result of increased confidence in the economy and reports that India's manufacturing sector grew by 11.1% in August 2006.

 

On July 23, 2007, the Sensex touched a new high of 15,733 points. The index touched the 15,828.98 mark the very next day.  On July 27, 2007 the Sensex witnessed a huge correction because of selling by Foreign Institutional Investors and global cues to come back to 15,160 points by noon. Following global cues and heavy selling in the International markets, the BSE Sensex fell by 615 points in a single day on August 1, 2007, the third such biggest fall in its history.  Following the same trend, the BSE Sensex fell by 643 points in a single day on August 16, 2007, which is the biggest fall since April, 2007 and the second biggest ever (absloute terms) in history.