IDFC AMC

Sensex Sector Representation
 

  • Sensex is representated by various sectors whose weight is based on free float market capitalization.
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  • Sectors representing the Sensex keeps changing based on the performance of the sector during an economic cycle and accordingly stocks are added and removed changing sector weightings.
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  • Over the years Sensex sector composition has changed and fewer sectors represent the Sensex.
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  • In 1990 around 15 sectors representated the Sensex. Gradually this has reduced and currently only 10 sectors make up the Sensex.
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  • Sensex at any given time is generally dominated by the top 3 sectors which have aggregate of around 50% weight based on free float market capitalization.
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  • Sector composition keeps changing; however there are 8 sectors namely Capital Goods, FMCG, Healthcare, Metal-Metal Products & Mining, Oil & Gas, Transport Equipments, Finance and IT which have been part of the index since 1998 although their weightings have kept changing.
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  • These 8 sectors at any given point have aggregate of more than 80% weightage in the index.
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  • Chart below gives a snapshot composition of Sensex, BSE Midcap and BSE Small cap indices.
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Sensex Composition

 

  • Chart below shows the 8 sector weighting (%) over the years as and when the sector changes were made.
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  • From the above chart, we can observe, Finance sector weighting has been increasing over the years.
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  • FMCG sector’s weighting has fallen over the years while Oil & Gas sector weightings have been in the same range.
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  • We can also see that at any given point of time highest weighting of a sector in the index has been around 20%.
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  • Charts below shows Sector distribution for Sensex, BSE Midcap and Small cap Index.

 
Sensex sector distribution

 
BSE Mid cap & small cap  sector distribution

 

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