How does SENSEX works?
Everybody knows about Sensex, but only a few knows how it works. The BSE SENSEX (Bombay Stock Exchange Sensitive Index), free-float market capitalization-weighted stock market index of a few companies listed by the Sensex. Sensex is just a sensitive index where if a companies performance or value increases, its value will also be gradually increased. For this, first the company should be registered in the stock exchange board. For the registration, the company should follow certain rules and should also achieve certain percentage of the shares issued by them should be in the hands of public. The company should also have some years of experience in the market.
After being registered the company is provided with points based on their performance. Now the floated shares in the market are purchased by big companies. If there is a demand for their share in the market, their point grows. But if the demand becomes low, then their points fall. The shares can be traded by anyone in the market. Like this many companies get registered. The stock exchange board adds up all the points of the registered companies, and gives the sensex points.
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