Understanding BSE Sensex: What Does It Measure?

BSE Sensex

The Bombay Stock Exchange is commonly known as Sensex. It is a foundation for the Indian financial outlook. It is often considered an indispensable index that has guided a myriad of investors, analysts and policymakers for ages. In this blog post, we will explore its role and importance in the Indian stock market. Also, we will measure why bse sensex is essential and shed light on its crucial role.

Significance of BSE in the Indian Financial Market

Sensex is an essential part of the Indian financial market. It generally reflects the country’s economic activity. It incorporates a group of top-performing companies listed on the BSE. Sensex plays a vital role in measuring the overall health of the stock market. It influences various investment decisions. In addition, it provides valuable insights to investors, analysts and policymakers. Hence, its significance on the stock market frontier cannot be overlooked.

Typically, Sensex includes leading companies that have high market capitalisation and liquidity. BSE Sensex is an index comprising a group of stocks that accurately represents the strength of the Indian market. These stocks are carefully selected based on several criteria, out of which high market capitalisation and liquidity are crucial as we stated before. It is a trusted measure of economic vitality.

What does Sensex exactly measure?

It acts as a measure of how the selected companies’ stock is performing. It is done by tracking their stock price trends. It acts as an indicator and summarises how trends are either increasing or decreasing. It is referred to as the mirror that reflects how well these companies are doing collectively. Hence, it gives us a snapshot of the Indian market’s health.

How is Sensex considered an investment tool?

Without a doubt, Sensex is not just any digit but a valuable tool for all the investors out there. It helps in comparing and contrasting the investment portfolios. The tracking record of the overall Sensex performance guides all investors to measure the performance of their investments in contrast to the overall market health. It helps them make wise decisions for their future wealth or long-term wealth.

What factors influence the Sensex?

Sensex is sensitive to multiple factors that can affect its path to a great extent. Several economic aspects such as GDP, Inflation, and interest rates have a remarkable influence on it.  In addition, global circumstances such as financial crises or geopolitical tensions and more.


Summing up, we can say that it is an invaluable factor that has been guiding investors, analysts and policymakers for ages. By providing a critical measure of the stock market, it turns out to be a vital factor. However, along with earning wealth, the risks associated with investing in BSE Sensex are not a hidden fact. Thus, you need to start diligently and carefully with some guidance. For your online broking services or if you want to trade like a pro, embark on your journey with 5paisa, a platform with advanced tools to trade. Furthermore, you will be equipped with knowledge of making successful investments.

Leave a Reply

Your email address will not be published. Required fields are marked *