Understanding the Base Value in the Sensex: Historical and Practical Insights

The Sensex, also known as the BSE 30, is a widely recognized stock market index that tracks the performance of 30 leading companies listed on the Bombay Stock Exchange (BSE).

The Base Value of the Nifty

The Nifty, a popular stock market index, has its base value set at 1000, and the starting date for this index was November 3rd, 1995. Interestingly, the Nifty began trading as futures contracts only in June 2000. At that time, the contract size was 200 shares per lot. Despite the base value being 1000, the Nifty has experienced periods where its value was lower than this mark. In May 2003, the index traded around 920, which was a significant drop from its base value. However, when it finally crossed 1000, there was considerable joy in the trading community.

The Base Year and Value of the Sensex

The base year for the Sensex is 1978-79 and its base value is set at 100. This means that when the Sensex was first calculated, it stood at 100, and any change from this value reflects a percentage change in the overall stock market performance.

The Current Value of the Nifty

Currently, the Nifty's base value remains at 100, while its current value is 9934, showing a significant increase since its inception. The fluctuation in value, both up and down, demonstrates the dynamic nature of the stock market and the impact of various economic and market factors.

Mixing Historical Context with Modern Insights

The journey of the Nifty and the Sensex is an excellent example of how stock market indices reflect real economic conditions. While the Sensex has its base in 1978-79, the Nifty’s journey started much later, in 1995. This allows investors to compare the performance of the Indian stock market over different periods and make more informed decisions. The base value serves as a benchmark, helping both experienced and novice investors understand the relative performance of the markets they are dealing with.

What is the Difference Between Trading/Investing in the SENSEX and Nifty?

For those interested in delving deeper, I recommend reading my previous answer on the difference between trading and investing in the SENSEX and Nifty. This article provides a comprehensive understanding of the nuances involved in these investment choices.

Key Takeaways

The Sensex has its base year at 1978-79 with a base value of 100. The Nifty has a base value of 1000, reflecting its starting point in 1995. Both indices have witnessed significant changes over time, underscoring the volatility and dynamics of the stock market.

Understanding the base value is crucial for anyone looking to navigate the Indian stock market. Whether you are a seasoned investor or a new entrant, knowing how these indices work can help you make smarter investment decisions.