Skip to content

Name the first stock market index in India

Name the first stock market index in India

Looking for the answer to the question below related to Financial Management ?

Name the first stock market index in India

 Options:

A. dow jones
B. dollex 30
C. nifty
D. sensex

The Correct Answer Is:

  • D. sensex

The correct answer is D. Sensex. The Sensex, short for the “Sensitive Index,” is indeed the first stock market index in India. It was introduced by the Bombay Stock Exchange (BSE) and plays a significant role in tracking the performance of the Indian stock market. Let’s explore in detail why this answer is correct and why the other options are not:

D. Sensex:

The Sensex is widely regarded as the first stock market index in India and serves as a barometer of the Indian equity market’s health and performance. It was first calculated on January 1, 1986, with a base value of 100.

The index represents a basket of 30 of the largest and most actively traded stocks listed on the BSE, covering a wide range of industry sectors. The Sensex provides investors and market participants with insights into the overall direction and sentiment of the Indian stock market.

The introduction of the Sensex was a pivotal moment in India’s financial history as it brought greater transparency and visibility to the country’s stock market. It provided investors with a benchmark against which they could assess the performance of their investments and make informed decisions.

Now, let’s examine why the other options are not correct:

A. Dow Jones:

The Dow Jones Industrial Average (DJIA), commonly referred to as the Dow Jones, is a well-known stock market index in the United States, not India. It was introduced in 1896 by Charles Dow and Edward Jones to represent the performance of 30 large, publicly traded companies in the U.S. While the Dow Jones is internationally recognized, it is not the first stock market index in India and is unrelated to the Indian stock market.

B. Dollex 30:

The Dollex 30 is not the first stock market index in India either. It is a stock market index that tracks the performance of 30 of the largest and most actively traded Indian companies that are part of the BSE 100 index and are also available for trading in the futures and options segment of the Singapore Exchange (SGX).

The Dollex 30 is primarily used by international investors who want exposure to Indian equities through the SGX, and it is not a domestic Indian index.

C. Nifty:

The Nifty, officially known as the Nifty 50 or the Nifty 50 Index, is another prominent stock market index in India. However, it was introduced later than the Sensex. The Nifty was launched by the National Stock Exchange of India (NSE) on April 22, 1996, and it represents the performance of 50 large-cap Indian stocks.

While the Nifty is a significant benchmark for the Indian equity market, it is not the first stock market index in India; the Sensex holds that distinction.

In summary, the Sensex is rightfully recognized as the first stock market index in India, introduced by the Bombay Stock Exchange (BSE) in 1986. It played a pivotal role in shaping India’s financial landscape by providing investors with a reliable benchmark for tracking the performance of the Indian stock market.

While other indices like the Nifty and Dollex 30 are also important in the Indian financial ecosystem, they were introduced after the Sensex and serve different purposes and markets.

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *