Mumbai, Jan 2 (NationPress) BSE Limited (BSE), the oldest stock exchange in Asia, celebrated a remarkable 40-year journey of the Sensex on Friday, honoring four decades of India’s premier equity index which has become a reflection of the nation’s capital market evolution accessible to the general public.

Introduced in 1986, the Sensex is India's inaugural stock market index, designed to represent the broader Indian equity landscape, comprising 30 high-profile constituents from various sectors such as financial services, technology, energy, FMCG, commodities, healthcare, and industrials.

This index accounts for nearly 40 percent of the total market capitalization in the country, serving as a critical benchmark for assessing India’s economic vigor and stock market performance.

Marking the importance of this milestone, Sundararaman Ramamurthy, the Managing Director and CEO of BSE, emphasized that this event signifies more than just an index; it is a celebration of India’s entire capital market journey.

“Transitioning from a closed market to becoming one of the most technology-driven and investor-focused ecosystems globally, the SENSEX has consistently recorded India’s growth narrative with reliability. As India advances towards Viksit Bharat, BSE remains dedicated to adapting to evolving market demands and reflecting the shifting economic landscape,” remarked Ramamurthy during the event.

Tuhin Kanta Pandey, Chairman of SEBI, noted that over the past four decades, “the Sensex has proven itself as a robust market indicator, reflecting India’s economic changes and the increasing sophistication of our capital markets.”

Since its launch in 1986, it has utilized a market-cap-weighted methodology featuring 30 component stocks, representing well-established and financially sound companies across essential sectors.

As of September 1, 2003, the Sensex has shifted to a free-float (float-adjusted) market-cap methodology, a widely accepted framework for index construction that most global equity indices adopt.

The Sensex stands as one of the most monitored benchmarks in India, boasting over 20 Exchange Traded Funds (ETFs) and index funds managing assets worth ₹2.5 lakh crore. It also ranks among the world’s most active index options contracts and has been recognized as the fastest-growing index derivatives contract for the last two years.

Since its inception, the Sensex has achieved a compounded annualized growth rate (CAGR) of 13.4 percent, closely aligning with India’s nominal gross domestic product (GDP) growth of approximately 13 percent during the same period.