HISTORY The Bombay Stock Exchange is the oldest exchange in Asia.

It traces its history to the 1850s, when four Gujarati and one Parsi stockbroker would gather under banyan trees in front of Mumbai's Town Hall. The location of these meetings changed many times, as the number of brokers constantly increased. The group eventually moved to Dalal Street in 1874 and in 1875 became an official organization known as 'The Native Share & Stock Brokers Association'. In 1956, the BSE became the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act. The Bombay Stock Exchange developed the BSE SENSEX in 1986, giving the BSE a means to measure overall performance of the exchange. In 2000 the BSE used this index to open its derivatives market, trading SENSEX futures contracts. The development of SENSEX options along with equity derivatives followed in 2001 and 2002, expanding the BSE's trading platform. Historically an open outcry floor trading exchange, the Bombay Stock Exchange switched to an electronic trading system in 1995. It took the exchange only fifty days to make this transition. This automated, screen-based trading platform called BSE On-line trading (BOLT) currently has a capacity of 8 million orders per day. The BSE has also introduced the world's first centralized exchange-based internet trading system, BSEWEBx.co.in to enable investors anywhere in the world to trade on the BSE platform.[5] The BSE is currently housed in Phiroze Jeejeebhoy Towers at Dalal Street, Fort area.

Type Location

Stock Exchange Mumbai, India 185547N 725001E18.929681N 72.833589E 1875 Bombay Stock Exchange Limited Madhu Kannan (CEO & MD) Indian rupee ( ) 5,112

Coordinates

Founded Owner Key people Currency No. of listings

MarketCap Volume

US$1 trillion (Dec 2011)[1] US$231 billion (Nov 2010) BSE SENSEX

Indexes

BSE Small Cap BSE Mid-Cap BSE 500

Website

www.bseindia.com

Session Timing Beginning of the Day Session 8:30 - 9:00 Pre-open trading session 9:00 - 9:15 Trading Session 9:15 - 15:30 Position Transfer Session 15:30 - 15:50 Closing Session 15:50 - 16:05 Option Exercise Session 16:05 -

INDICES

The graph of SENSEX from July 1997 to March 2011 The launch of SENSEX in 1986 was later followed up in January 1989 by introduction of BSE National Index (Base: 1983-84 = 100). It comprised 100 stocks listed at five major stock exchanges in India - Mumbai, Calcutta, Delhi, Ahmedabad and Madras. The BSE National Index was renamed BSE-100 Index from October 14, 1996 and since then, it is being calculated taking into consideration only the prices of stocks listed at BSE. BSE launched the dollar-linked version of BSE-100 index on May 22, 2006. BSE launched two new index series on 27 May 1994: The 'BSE-200' and the 'DOLLEX-200'. BSE-500 Index and 5 sectoral indices were launched in 1999. In 2001, BSE launched BSE-PSU Index, DOLLEX-30 and the country's first free-float based index - the BSE TECk Index. Over the years, BSE shifted all its indices to the free-float methodology (except BSE-PSU index). BSE disseminates information on the Price-Earnings Ratio, the Price to Book Value Ratio and the Dividend Yield Percentage on day-to-day basis of all its major indices. The values of all BSE indices are updated on real time basis during market hours and displayed through the BOLT system, BSE website and news wire agencies. All BSE Indices are reviewed periodically by the BSE Index Committee. This Committee which comprises eminent independent finance professionals frames the broad policy guidelines for the development and maintenance of all BSE indices. The BSE Index Cell carries out the day-to-day maintenance of all indices and conducts research on development of new indices.[8] SENSEX is significantly correlated with the stock indices of other emerging markets

TIMELINE

Following is the timeline on the rise of the SENSEX through Indian stock market history. 1830's Business on corporate stocks and shares in Bank and Cotton presses started in Mumbai.

1860-1865 Cotton price bubble as a result of the American Civil War. 1870 - 90's Sharp increase in share prices of jute industries followed by a boom in tea stocks and coal 1978-79 Base year of SENSEX, defined to be 100. 1986 SENSEX first compiled[6] using a market Capitalization-Weighted methodology for 30 component stocks representing well-established companies across key sectors. 30 October 2006 The SENSEX on October 30, 2006 crossed the magical figure of 13,000 and closed at 13,024.26 points, up 117.45 points or 0.9%. It took 135 days for the SENSEX to move from 12,000 to 13,000 and 123 days to move from 12,500 to 13,000. 5 December 2006 The SENSEX on December 5, 2006 crossed the 14,000-mark to touch 14,028 points. It took 36 days for the SENSEX to move from 13,000 to the 14,000 mark. 6 July 2007 The SENSEX on July 6, 2007 crossed the magical figure of 15,000 to touch 15,005 points in afternoon trade. It took seven months for the SENSEX to move from 14,000 to 15,000 points. 19 September 2007 The SENSEX scaled yet another milestone during early morning trade on September 19, 2007. Within minutes after trading began, the SENSEX crossed 16,000, rising by 450 points from the previous close. The 30-share Bombay Stock Exchange's sensitive index took 53 days to reach 16,000 from 15,000. Nifty also touched a new high at 4659, up 113 points. The SENSEX finally ended with a gain of 654 points at 16,323. The NSE Nifty gained 186 points to close at 4,732. 26 September 2007 The SENSEX scaled yet another height during early morning trade on September 26, 2007. Within minutes after trading began, the SENSEX crossed the 17,000-mark. Some profit taking towards the end saw the index slip into red to 16,887 - down 187 points from the day's high. The SENSEX ended with a gain of 22 points at 16,921. 9 October 2007 The BSE SENSEX crossed the 18,000-mark on October 9, 2007. It took just 8 days to cross 18,000 points from the 17,000 mark. The index zoomed to a new all-time intra-day high of 18,327. It finally gained 789 points to close at an all-time high of 18,280. The market set several new records including the biggest single day gain of 789 points at close, as well as the largest intra-day gains of 993 points in absolute term backed by frenzied buying after the news of the UPA and Left meeting on October 22 put an end to the worries of an impending election. 15 October 2007 The SENSEX crossed the 19,000-mark backed by revival of funds-based buying in blue chip stocks in metal, capital goods and refinery sectors. The index gained the last 1,000 points in just four trading days. The index touched a fresh all-time intra-day high of 19,096, and finally ended with a smart gain of 640 points at 19,059.The Nifty gained 242 points to close at 5,670.

29 October 2007 The SENSEX crossed the 20,000 mark on the back of aggressive buying by funds ahead of the US Federal Reserve meeting. The index took only 10 trading days to gain 1,000 points after the index crossed the 19,000-mark on October 15. The major drivers of today's rally were index heavyweights Larsen and Toubro, Reliance Industries, ICICI Bank, HDFC Bank and SBI among others. The 30-share index spurted in the last five minutes of trade to flypast the crucial level and scaled a new intra-day peak at 20,024.87 points before ending at its fresh closing high of 19,977.67, a gain of 734.50 points. The NSE Nifty rose to a record high 5,922.50 points before ending at 5,905.90, showing a hefty gain of 203.60 points. 8 January 2008 The SENSEX peaks. It crossed the 21,000 mark in intra-day trading after 49 trading sessions. This was backed by high market confidence of increased FII investment and strong corporate results for the third quarter. However, it later fell back due to profit booking. 13 June 2008 The SENSEX closed below 15,200 mark, Indian market suffer with major downfall from January 21, 2008 25 June 2008 The SENSEX touched an intra day low of 13,731 during the early trades, then pulled back and ended up at 14,220 amidst a negative sentiment generated on the Reserve Bank of India hiking CRR by 50 bps. FII outflow continued in this week. 2 July 2008 The SENSEX hit an intra day low of 12,822.70 on July 2, 2008. This is the lowest that it has ever been in the past year. Six months ago, on January 10, 2008, the market had hit an all time high of 21206.70. This is a bad time for the Indian markets, although Reliance and Infosys continue to lead the way with mostly positive results. 6 October 2008 The SENSEX closed at 11801.70 hitting the lowest in the past 2 years. 10 October 2008 The SENSEX today closed at 10527, 800.51 points down from the previous day having seen an intraday fall of as large as 1063 points. Thus, this week turned out to be the week with largest percentage fall in the SENSEX 18 May 2009 After the result of 15th Indian general election SENSEX gained 2100.79 points from the previous close of 12173.42, a record one-day gain. In the opening trade itself the SENSEX evinced a 15% gain over the previous close which led to a two-hour suspension in trading. After trading resumed, the SENSEX surged again, leading to a full day suspension of trading. 19 October 2010 BSE introduced the 15-minute special pre-open trading session, a mechanism under which investors can bid for stocks before the market opens. The mechanism, known as 'pre-open session call auction', lasted for 15 minutes (from 9:00-9:15 am).[7] 5 November 2010 BSE SENSEX crossed the 21000 mark (exactly 21004.96).

27 December 2010 BSE SENSEX is at 20,028.93.

MUMBAI, February 28, 2012

Rising oil prices and its impact on inflation affect sentiment

The Bombay Stock Exchange sensitive index, Sensex, tumbled by 477.82 points or 2.67 per cent on Monday recording its biggest fall in five months, due to renewed worries on inflation as oil prices are likely to go up with escalating tensions over Iran's nuclear programme. The undercurrent was hit by worries over rising oil prices and its impact on inflation. Reports also said that the government was considering a hike in the prices of petrol and diesel. Any fresh spike in inflation could prompt the Reserve Bank of India (RBI) to postpone the proposed reduction in interest rates. On the other hand, liquidity remains tight. The government's fiscal situation is also not conducive. The trade and current account deficits too are widening. All this calls for continued caution, said Amar Ambani, Head of Research, IIFL. Index heavyweights Reliance Industries, ICICI Bank and Infosys dragged the benchmark index down and it closed at 17445.75. The broader index, NSE's 50-share Nifty, lost 148.10 points or 2.73 per cent. On the BSE, mid-cap stocks lost 3.02 per cent, small-cap 3.26 per cent and the BSE-500 2.81 per cent. The indices were moving up in this calendar year with a robust inflow of FII money of around $5.5 billion so far. But oil prices moved up to around $125 a barrel, threatening indications of a slowing inflationary pressure.

The fall was led by the realty sector with 5.29 per cent followed by metal 4.86 per cent, power 4.03 per cent and banks 3.97 per cent. It was a poor start to the week on Monday as the Sensex saw biggest one-day fall since September 2011 likely led by unwinding of long positions. U.P. election results, expected on March 6, and spike in crude oil prices to 10-month high were among the factors partly responsible for the sharp sell-off, said Sanjeev Zarbade, Vice-President (Private Client Group Research), Kotak Securities. Key factors to watch out for, according to Mr. Zarbade, would be, the Iran imbroglio and its impact on crude oil price, the second round of LTRO in Europe (a decision on this is scheduled on Wednesday), the outcome of state elections and finally, the budget in mid-march.

India's Economic Decline Is One Of The Most Under-Reported Stories This Year
Economist Tyler Cowen tweeted, "the current economic deterioration of India is the single most important under-reported story these days". We've been tracking India's inflation and stock market woes for some time, so we went digging. The Bombay Stock Exchange has been one of the world's worst performing stock markets this year. The BSE 30-share index is off 18.06% year-to-date, worse than the stock markets of other BRIC economies. Foreign investors have been pulling out of the country all year as India continues to struggle with inflation, and investors continue to pick safe havens. The Indian economy which gained 6.9% in the second quarter, is expected to grow 7.5% this year, according to Indian finance minister Pranab Mukherjee, against previous estimates of 9% growth. And the Indian Rupee is off 13.14% year-to-date (YTD) against the U.S. dollar, and 13.72% against the euro. The currency has been declining as inflation remains consistently high, driven up by food costs.

Inflation and capital flight are two clear factors that have hurt the Indian economy. First, inflation has stayed over 9% since December 2010, and wage inflation is also on the rise. The Reserve Bank of India (RBI), the country's central bank has been hiking interest rates since March 2010 to curb inflation. India's finance ministry released a statement showing that rising interest rates in part caused industrial growth to drop to 5% from April-September in the fiscal year 2011 - 2012, from 8.8% a year ago.

The higher interest rates have tightened liquidity in the Indian market over the year, and the central bank has now promised to inject liquidity through debt repurchases. Moody's recently cut India's banking sector outlook to negative, from stable: "India's economic momentum is slowing because of high inflation, monetary tightening, and rapidly rising interest rates. At the same time, concerns have emerged over the sustainability of the recovery in the US and Europe, and the rise in the borrowing program of the Indian government, which could drain funds away from the private credit market. "With asset quality, given the tightening environment, we anticipate that it will deteriorate over the next 12-18 months, thereby causing an increase in provisioning needs for the banks in FY2012 and FY2013." Secondly, capital flight in the wake of the European debt crisis and India's corruption scandals have landed another massive blow to the economy. Foreign investors looking to cut risk have pulled their money out of India which counts on foreign funds to keep its current account gap in check. Foreign investors have only $530 million in Indian equities this year, compared with $28.9 billion a year ago, according to the Securities and Exchange Board of India (SEBI). Dr. Subir Gokarn, deputy governor of the RBI explains the impact of the European debt crisis and skittish foreign investors on the Indian economy: The impact of this recent global instability on India has been enormous. India is a structurally current account deficit economy. This deficit is, in turn, financed by capital inflows, which over the past several years, had been large and stable enough to more than offset the current account deficit. India has large reserves, of course, over $300 billion, but because we have a current account deficit, the reserves are essentially counterbalanced against our external liability position. In an extreme scenario, if there is a large outflow of capital, the adequacy of reserves will be judged by the economy's ability to finance the current account deficit and, over and above that, meet shortterm claims without any disruption or loss of confidence. India runs a trade deficit, and last month it was reported that Indian companies have raised about $30 billion in foreign debt in 2011. This would cost $5.4 billion more to repay because of the weakness in the rupee.