 "Sensex mirrors changes in economy over 30 years")
The BSE exchange’s benchmark 30-share Sensitive Index, or Sensex, has mirrored changes in the economy in the past three decades. In this period, total Sensex market capitalisation has zoomed more than 300 times, to Rs 47.8 lakh crore from Rs 14,800 crore.
Since it was first compiled in 1986, the Sensex has come to be known as market bellwether and a chronicler of bull runs. The rally between 1990 and 1992, from 650 points to 4,467, was a major event for Indian equities and later came to be associated with the Harshad Mehta scam. Subsequent rallies of 1998-2000, led by information technology (IT) stocks, and the 2003-07 run-up triggered by global liquidity, were also captured by the Sensex. (THE CLOSING MILESTONES)
The index's surge has been uneven. It took nearly two decades to touch 10,000 but the surge from there to 20,000 points happened in less than two years. The index took another seven and a half years to touch 30,000.
Of the original 30 Sensex constituents, only seven — Tata Steel, Tata Motors, Reliance Industries, ITC, Mahindra & Mahinda, Larsen & Toubro and Hindustan Unilever — are still part of the index. The past decade has seen the emergence of new businesses such as IT and telecom, a change reflected in the index by the inclusion of IT bellwethers Tata Consultancy Services, Infosys and Wipro, and telecom major Bharti Airtel.
The banking sector has grown in prominence. While not a single lender formed part of the original Sensex composition, as many as four banks – SBI, HDFC, ICICI and Axis -- feature in the Sensex today, 17 per cent of the total market capitalisation. “The growth of banking in the past two decades has been enormous, with the credit base growing from Rs 5-6 lakh crore to about Rs 77 lakh crore now,” said G Chokkalingam, chief executive, Equinomics Research.
Old-economy businesses or companies that failed to keep up with the changing lifestyle and aspirations of consumers have faded into oblivion. Century Textiles, Bombay Dyeing, Futura Polyester, Hindustan Motors and Mukand are names that are long out of the original Sensex list.
“In terms of business, the Nifty has raced ahead of the Sensex but the latter has a strong brand recall and is still referred to as the barometer for the economy,” said a senior broker, on condition of anonymity.
Asia Index, provider of the Sensex and a joint venture between BSE and S&P Dow Jones Indices, said it would use its global network to popularise Sensex among international investors looking to allocate assets in equities.
