Why does Sensex fascinate you? The answer lies in its journey

Since its inception in January 1986, starting at around 550 points, the Sensex has charted a remarkable journey, reaching an all-time high of over 80,000 points today — a march from under-73,000 at the turn of the year. Despite enduring sharp declines during events like the 2008 financial crisis and the 2020 pandemic, the Sensex has consistently demonstrated resilience and growth. Let’s explore its significant milestones and interesting trends from 1,000 to its current high.

Sensex stands for Sensitive Index of the Bombay Stock Exchange (BSE), which works in collaboration with the S&P BSE index committee, to select the 30 constituents of the index. Here, S&P refers to financial services company Standard and Poor’s, which has an understanding with Dow Jones to manage indices across the world. Sensex (and SP 500 too, for example) is one of the indices they manage.

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Fashioning the Sensex: From concept to icon

By the way, the term “Sensex” was coined by stock market analyst Deepak Mohoni — an IIT graduate and an MBA from IIM — in 1989, blending “Sensitive” and “Index” to reflect its purpose as a sensitive indicator of market trends. Originally designed to reflect market sentiment and investor confidence, the Sensex quickly gained popularity as a barometer of India’s economic health, attracting attention both domestically and internationally.

But its roots are much deeper. The BSE came up in 1875 under a sprawling banyan tree in Mumbai, then called Bombay. Hence, the name “Bombay Stock Exchange”, which holds the distinction of being Asia’s oldest stock exchange.

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The BSE was founded by Premchand Roychand, then known as the cotton king in India. He was one of the founders of the Native Share and Stock Brokers’ Association, set up taking inspiration for similar bodies mushrooming in Europe at that time. The BSE started as a gathering place for brokers trading stocks in Mumbai’s burgeoning commercial hub.

It got a major boost after Independence, when in 1957, the Indian government gave it a permanent recognition under Securities Contracts (Regulation) Act (SCRA). Sensex was born 39 years later as the first equity index in India.

The early years: A bumpy yet steady ride (1986-2000)

Beginning from 550 points at the turn of 1986, the Sensex’s first 1,000-point rise took 970 trading sessions, achieving this milestone in July 1990, over four years after its inception.

The next 1,000 points (in January 1992) came much faster, taking only 270 sessions in less than 18 months, highlighting an early acceleration in market growth. This has been the story by and large of the stupendous growth of the Sensex. The next doubling happened in just two months — Sensex crossed 4,000-mark in Marcy 1992.

But the journey became slow and excruciating through the 1990s, reaching 5,000 points in October 1999 — 13 years after it was launched. This decade saw gradual but steady growth as the market slowly built momentum and investor confidence. It caught some pace afterwards and crossed the 6,000-mark in February 2000.

The 2000s: Rapid gains and also setbacks (2000-2014)

The new millennium brought rapid gains:

• 10,000 points: Crossed in February 2006, in seven years after reaching 5,000.

• 11,000 to 13,000 points: All crossed within the same year by October 2006.

• 20,000 points: Reached in December 2007, taking 109 sessions for this jump.

However, the global financial crisis of 2008 slowed its progress. It took three years for the Sensex to gain the next 1,000 points, reaching 21,000 in November 2010. The following 1,000 points came almost four years later in March 2014, indicating the lingering impact of the crisis.

The mid-2010s: A strong rebound, the achchhe din effect (2014-2019)

• 28,000 points: Crossed in November 2014, marking a strong year with multiple milestones.

• 29,000 points: Reached in January 2015, just 50 sessions later.

• 30,000 points: Hit in April 2017 after 225 sessions navigating through the November 2016 decision of demonetising high-value currency notes by the Indian government, demonstrating renewed investor confidence.

• 35,000 points: Surpassed in January 2018 after reaching 34,000 in December 2017, taking only 16 sessions for the 1,000 points.

• 40,000 points: Crossed in June 2019, continuing its upward trajectory.

The 2020s: Navigating pandemic and beyond (2020-2024)

Despite the pandemic, the Sensex showed remarkable resilience. In what took many by surprise, the Sensex kept breaching new heights through the pandemic years.

• 45,000 points: Crossed in December 2020.

• 50,000 points: Achieved in February 2021.

• 60,000 points: Reached in September 2021, marking a 10,000-point rise in the same year.

The journey from 60,000 to 65,000 points took over 438 sessions, with the milestone reached on this day (July 3) last year. In one year, the Sensex gained 15,000 points — the number it took 20 years to gather after its inception.

• 66,000 and 67,000 points: Both crossed in July 2023.

• 68,000 points: Surpassed on December 4, 2023, followed by a swift jump to 69,000 points the next day.

• 70,000 to 72,000 points: Crossed in mid- to end-December 2023.

The Sensex continued to climb in 2024:

• 73,000 points: Reached in January and crossed 74,000 points in March.

• 75,000 point: This mark was surpassed briefly in May before plunging to below 73,000 amid a seven-phase parliamentary election with reports casting doubts over continuation of the economic policies of the government, and regaining the mark again by the month-end to fall below one more time.

• 76,000 points: The end of parliamentary election saw the Sensex zoom to over 76,000 on the first trading day of June, crossing the next two 1,000-points in 10 and eight days.

• 80,000 points: The new record was achieved today after a week, and five trading days since crossing the 78,000-mark.

The Sensex’s journey from 1,000 to 80,000 points in 34 years is a testament to the Indian stock market’s resilience and growth potential. Despite numerous challenges, including financial crises and global pandemics, the Sensex has continued to achieve new heights, reflecting the robust economic progress and investor confidence in India’s future.

Meanwhile, the Nifty or the National Stock Exchange (NSE) index also reached a new high today at over 24,257 points. In contrast to BSE’s long-standing presence, the NSE emerged in 1992 with a mandate to modernise India’s stock trading practices.

Founded by leading financial institutions including IDBI, ICICI, LIC, SBI, and IFCI, the NSE introduced electronic trading, revolutionising the traditional open outcry system with a high-tech platform. The move was aimed at enhancing market efficiency and transparency, positioning the NSE as a formidable competitor to the BSE.