What is a Stock Market Index?

-    Stock market indices basically convey the mood of the market and act as the market’s messengers
-    Indices represent different clusters of stocks/industries and the rise and fall in these indices’ values is a close representation of the market’s view on the stocks that make these indices.  Hence, stock market news is cumulatively reflected in the movement of the index
-    Simply put, an index represents the composite value of shares of different companies traded on a particular stock of exchange
-    Till late 1980s, there was no index for India’s stock markets, till the Bombay Stock Exchange (BSE) introduced the ‘Sensex’ in 1986 (which represents composite share value of 30 selected companies trading in BSE).
-    Later in the 1990s, the National Stock Exchange (NSE) introduced another index, popularly known as the Nifty (which represents composite share value of 50 selected companies trading on NSE)
Stock market indices provide us with a common measurement tool for the raise and fall in prices of shares that are traded on the index

First list of companies in BSE Sensex as on 01st January 1978

Companies in the BSE Sensex      
Asian Cables    Indian Organic      
Ballarpur Industries Limited    Indian Rayon      
Bombay Burmah    ITC      
Ceat Limited    Kirloskar Cummins      
Century Textiles    L&T      
Crompton Greaves    Mahindra & Mahindra      
Glaxo Smithkline Pharma    Mukand Iron      
Grasim    Nestle      
GSFC    RIL      
Hindalco    Scindia Shipping [4]      
Hindustan Motors    Siemens      
HLL    Tata Motors      
Indian Hotels Company    Tata Power      
Indian Organic    Tata Steel      
Indian Rayon    Zenith   

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