The
markets are bearish, investors are confused and the judgement
has been passed—It's sunset for the Indian stock markets.
The market, once gleaming with pride and rising high on
the bull, is facing a sudden crisis. It is now well-known
that the current crisis in the global market is due to subprime
crisis in the US resulting in drying of liquidity. This
brings us to the core question—what should an investor
do in such a scenario? Amidst this bewildering scenario,
one must remember that all is not lost yet.In
fact, it may be a blessing in disguise for the investor
as the stock prices of many good companies are down and
he may think of buying them.
Sensex
is the short form of the Bombay Stock Exchange Sensitive
Index. It is a benchmark of the health of the share market.
This benchmark has become the lightening rod for capturing
the entire range of emotions that stock markets are able
to generate. If it goes down, it means that the market is
going down (bear market) and if it goes up, it means that
the market is going up (bull market).It
captures the movement of the share prices. It is a basket
of 30 constituent stocks representing a sample of blue-chip
companies. The base year of sensex is 1978-79 and the base
value is 100. Sensex is an indicator of all the major companies
listed on the Bombay Stock Exchange. It is considered as
the true measure of the stock market by many investors.
It
includes the contribution from different groups of companies
like pharma stocks, cement stocks, auto stocks, new economy
stocks, etc. There are certain guidelines for selection
of constituents in the sensex like the scrip should have
a listing history of at least three months on the BSE, should
have been traded on each and every trading day in the last
three months and should figure in the top 100 companies. |
