Financial Daily from THE HINDU group of publications
Tuesday, Feb 07, 2006
Financial Daily from THE HINDU group of publications Tuesday, Feb 07, 2006 |
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Stock Markets Markets - Events Sensex 100 & 10,000: A dramatic story S. Vaidya Nathan
SENSEX 10,000 is obviously a far cry from Sensex 100 in terms of numbers. The most interesting aspect is, however, the changes in the basket of Sensex stocks (refer table 1). Stocks such as Asian Cables, Scindia Steamship, Bombay Burmah, Zenith and Indian Organic Chemicals were part of the Sensex initially, when it was started in 1986 with a base period as 1978-79 with a value of 100.These stocks barely attract investor attention now. There are only eight stocks, which have remained in the Sensex at both these levels. Only six — Hindustan Lever, ITC, Tata Steel, Tata Motors, Grasim and ACC — never went out. A plethora of other changes to the Sensex basket have left us with a portfolio of stocks that reflects the Indian economy and its transition over the past couple of decades. IT was initially unknown quantity in the Indian context though TCS and Infosys had started operations on a small scale. They have now become key components of the index. Several PSU stocks, too, figure prominently now, while the Sensex at 1,000 was made of the then-private sector blue-chip companies. Interestingly, only two stocks — ACC and Tata Motors — traded at above Rs 100; today, despite stocks splits, 29 of the 30 stocks trade at above Rs 100. The exception is Gujarat Ambuja, which, too, has slipped below Rs 100 only due to bonus and stock split in mid-2005.
Even over the past decade, the composition of the Sensex (refer table 2) reveals the dominant presence of the finance and IT sector. They have gained space, as commodity, consumer products, auto and diversified sector plays have shed share. Share of commodity stocks have declined from 42 per cent to 27 per cent despite the inclusion of ONGC, which has a weight of 13.5 per cent. The composition of the top ten stocks reflects the changes in the economy with only Reliance and ITC retaining their presence over the past decade.
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