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SENSEX is also known as BSE Sensex. It stands for Stock Exchange Sensitive Index and is the stock market index for the Bombay Stock Exchange which calculates the movement on BSE. A stock market analyst Deepak Mohoni termed the word Sensex which was a blend of words ‘Sensitive’ and ‘Index’. It is a free-float market-weighted stock market index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange. The 30 constituent companies which are some of the largest and most actively traded stocks, are representative of various industrial sectors of the Indian economy. It was launched January 1. The base value of the SENSEX was taken as 100 on 1 April 1979 and its base year as 1978-1979. The index is calculated based on a free float capitalisation method, a variation of the market capitalisation method. Instead of using a company's outstanding shares it uses its float, or shares that are readily available for trading. Free Floating capital implies total capitalization less Directors shareholding. As per free float capitalisation methodology, the level of index at any point of time reflects the free float market value of 30 constituent stocks relative to a base period. The market capitalisation of a company is determined by multiplying the price of its stock by the number of shares issued by corporate actions, replacement of scrips. More

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