How SENSEX is calculated?

Sensex is calculated using the “Free-float Market Capitalization” methodology. As per this methodology, the level of index at any point of time reflects the Free-float market value of 30 component stocks relative to a base period. The market capitalization of a company is determined by multiplying the price of its stock by the number of shares issued by the company. This market capitalization is further multiplied by the free-float factor to determine the free-float market capitalization.

The base period of Sensex is 1978-79 and the base value is 100 index points. This is often indicated by the notation 1978-79=100. The calculation of Sensex involves dividing the Free-float market capitalization of 30 companies in the Index by a number called the Index Divisor.

The Divisor is the only link to the original base period value of the Sensex. It keeps the Index comparable over time and is the adjustment point for all Index adjustments arising out of corporate actions, replacement of scrips etc. During market hours, prices of the index scrips, at which latest trades are executed, are used by the trading system to calculate Sensex every 15 seconds and disseminated in real time.

Free-float Methodology refers to an index construction methodology that takes into consideration only the free-float market capitalisation of a company for the purpose of index calculation and assigning weight to stocks in Index. Free-float market capitalization is defined as that proportion of total shares issued by the company that are readily available for trading in the market.It generally excludes promoters’ holding, government holding, strategic holding and other locked-in shares that will not come to the market for trading in the normal course. In other words, the market capitalization of each company in a Free-float index is reduced to the extent of its readily available shares in the market.

Have a nice day!

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Foreign Exchange

A foreign exchange transaction has two cost components. One is the currency exchange rate. This is the amount of one currency required to buy one unit of another currency. The second is the fee charged by an intermediary. Forex traders refer to this as the “spread” charged by forex brokers. For individuals exchanging currency in small amounts to go shopping while traveling, for example the transaction fee is usually in the form of a percentage added to the cost of the currency exchange rate. The brokers generally charge between 50 paise to 75 paise in case of exchanging one dollar.

Currency prices are affected by a variety of economic and political conditions, most importantly interest rates, GDP, unemployment rate, inflation and political stability. Before any major economic data release, there will be an expectation figure expected by economists, Forex market will only respond accordingly if the figure release is far away from the expected figure.

Governments sometimes participate in the Forex market to influence the value of their currencies, either by flooding the market with their domestic currency in an attempt to lower the price, or conversely buying in order to raise the price. This is known as Central Bank intervention. However, the size and volume of the Forex market makes it impossible for any one entity to drive the market for any length of time.


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HAVE A NICE DAY!

KASAB ka HE-SAAB?

Ajmal kasab should be given death sentence for all the sins he committed. But i think the government took too long in this case as it always does. That is the reason INDIA has always been a soft target for the terrorists. The terrorists know that they would be treated like visitors in our jails. And would be given plenty to eat along with all the security they need. Kasab is costing India Rs 2 lakhs per day & so far Rs 35 crore have been spent on Kasab.

The system is so soft on these terrorists that there is no fear in the minds of anyone before commiting a crime of any sort. These criminals are given food and provided security, when the people in INDIA are dying of hunger. Then what happens is a hijacking takes place & these killers are set free. The law has to be strict on these issues, rather these killers must be given some brutal punishments before they are hanged. So that anyone who dares such deeds must think twice before coming to India.

The law has to get strict like the ones in ARAB countries, this is the only way to set examples for these terrorists or other criminals so that the crime may be reduced to some extent. As these hideous animals dont fear for their lives anymore.

SENSEX & NIFTY

The Sensex is an “index”. It gives you a general idea about whether most of the stocks have gone up or have gone down. The Sensex is an indicator of all the major companies of the BSE. The Nifty is an indicator of all the major companies of the NSE.


If the Sensex goes up, it means that the prices of the stocks of most of the major companies on the BSE have gone up. If the Sensex goes down, this tells you that the stock price of most of the major stocks on the BSE have gone down. Just like the Sensex represents the top stocks of the BSE, the Nifty represents the top stocks of the NSE.

Just in case you are confused, the BSE, is the Bombay Stock Exchange and the NSE is the National Stock Exchange. The BSE is situated at Bombay and the NSE is situated at Delhi. These are the major stock exchanges in the country. There are other stock exchanges like the Calcutta Stock Exchange etc. but they are not as popular as the BSE and the NSE. Most of the stock trading in the country is done through the BSE & the NSE.


Besides Sensex and the Nifty there are many other indexes. There is an index that gives you an idea about whether the mid-cap stocks go up and down. This is called the “BSE Mid-cap Index”. There are many other types of indexes. There is an index for the metal stocks. There is an index for the FMCG stocks. There is an index for the automobile stocks etc.

If you are interested in knowing how the SENSEX is calculated, then do refer to the upcoming blogs.

T20 WORLD CUP

As the 20-20 world cup kicks off today, all eyes are set on the Indian cricket team. Will Dhoni triumph or will Afghanistan upset India on their first appearance. We as Indians expect our side to win, but the bowling seems to be on the weaker side.

Our hope Virender Sehwag is not playing & there would be a lot of pressure on Murali Vijay. He has shown how aggressive he can get in the IPL. Suresh Raina has been promising since a long time & he can play as per the demand of the situation, he takes no time in switching gears. Gautam Gambhir has been the new Mr Dependable, he still looked out of form in the IPL. Yusuf Pathan needs to be firing if India wants to get any closer to the trophy. Yuvraj Singh is unstoppable when he gets going, but the problem with him at the moment is his form, he has not been able to convert the 20’s & 30’s into some bigger knocks.

India might play with only three genuine bowlers as the team has a lot of bowling options present in Raina, Yuvraj & Yusuf. But the problem is except Zaheer Khan no other Indian bowler is in form at present. Dhoni will want to play Nehra as the other two options are Praveen Kumar & Vinaykumar. Harbhajan would be the lead spinner, maybe Chawla gets a game.

My wishes are as always with Team India as they are going to enjoy the best of cricket in the carribean. Hope they get a chance to beat pakistan somewhere in the tournament.

All The Best!

Its A Pressure Cooker Life

In today’s world, Living life has become a pressure cooker thing. No one is spared from being under pressure. Right from the time we take birth till we find a  place in cradle, we are constantly living life under pressure. A child who has just began to see the world and has barely been out of his innocence, is put under pressure. He is under pressure from his ever demanding parents, apart from being  top in the class, he has to even excel in sports and other extra cuuricular activities he participates. Nobody even cares whether he likes the stuff he is asked to perform or not.

Now comes the next phase in life “teenage” a rebelious life. One feels they are constantly put under pressure to become doctors, engineers etc. that they find it often easy to put off their life then to run in the race in which he has to come out a winner and never liking to run in the first place. India Alone is facing so high rate of Teenage suicide which clearly reflects to the stress they are put to. The pressure to perform and achieve something great and secure a good salary package job from a MNC company which are few of the issues that a normal teenager has to undergo in day to day life.

The adult phase is longest phase of Man’s life. Now new kinds of stress comes to his life. the pressure to perform in his work life so that he can support his family, provide the ever demands of his wife, children and so on…. if he is not able to meet a single demand of theirs then you are termed a very unsuccessful man. Hence pressure to preform and stand out to his family his transfers his part of his pressure to his children and his spouse. This cycle of transfering the pressure to each other has created a very demanding world and a very unforgiving  one too.

In this ever demanding  world we ought to handle the pressure, but this pot boiling situation often leads to spilling of some. we often try to find some means or other to escape from the pressure which we only create. There is no remedy for this however its very best to keep your head cool and face this harsh system with a smiling face and say” I am ready for you and will take you down like others who came along before you coz its ME and its Me who will emerge VICTORIOUS”…

I am what I Am. I am you and everything you can think of.

BANDH is the right way???

As we all know today 27th April the opposition parties have called for bharath bandh, as we are a democracy these nuts often dont realise how much pain they cause to tha “aam janta”. How happy are you all from this bandh? Is this bandh the right answer to the rising inflation? Can these bandh’s stop corruption? I guess you all might have the right answer.

People are stuck at airports and railway stations, because the autos & taxis are not operating in a few cities. But these politicians have never cared about the public(atleast the civilised one’s), all they know is to brain wash their party members & a stupid breed of followers. Even the educated mass is falling in their traps & their is no control of police or any other authority on them.

Buses are burnt & other public property damaged to curb down inflation but this would only result in an increase in direct & indirect taxes. The more we cause damge to these public assets the more we would have to shell out from our pockets to bring all these assets back. This is the worst one can do to only realise that he looted himself. Nothing would go from the bank balance of these politicians.

Most of the developed countries or even the states in India today are either free from these strikes or their is a minimum number of strikes in these developed places. The reason being the people have realised where their gain is & its better to work for the development of the country then to keep pulling it back only to find that we have not only created troubles for our fellow citizens but also have purchased some shame for the country.

JAI HIND!