Stock market trading has a history of more than 130 years in India, but the Sensex as we know it, was conceptualised and put in place only in 1986.
MUMBAI: Stock market trading has a history of more than 130 years in India, but the Bombay Stock Exchange Sensitive Index, or Sensex as we know it, was conceptualised and put in place only in 1986.
Its base base year is 1978-79, for which its value is taken as 100.The market capitalisation-weighted index measures the performance of just 30 companies, but ever since launch, it has taken investors through smooth as well as tumultuous rides, making many a dream and shattering a few.
DNA Money tracks the Sensex’s existence till July 6, 2007, when it briefly flirted with Mount 15K and then ended just below.
From its official launch in 1986 till around the end of 1988, the Sensex moved in the 400- 700 range, with wild oscillations.
After the first three months of 1989, it consistently started trading above 700.It was in April 1990 that the 800 barrier was crossed for the first time. It was a big milestone then.
July 25, 1990 was a memorable day in the history of the Indian capital markets. It’s on that day that the Sensex breached the 1,000 mark for the time ever.
In 1991, then finance minister Manmohan Singh unveiled his liberalisation policy, giving the markets a further fillip. The Sensex responded, crossing 2,000 on January 3, 1993.
The next 1,000 points were made in a matter of three months, with the Sensex touching 3,000 on March 1, 1992.
With Big Bull Harshad Mehta actively involved in the markets at that time, it didn’t take much for the big leap. On March 24, 1992, the Sensex recorded its largest gain in a single day, rising 13.14%. In fact, Sensex 4,000 came in just 15 trading session from Sensex 3,000. The 4K mark was breached for the first time on March 30, 1992.
But soon thereafter, the biggest scam in the history of the Indian capital markets was unearthed.In a single day, on April 28, 1992, the Sensex recorded its biggest drop ever in terms of percentage, shedding 12.77% or 570 points.
Called the Harshad Mehta scam, it spilled so much blood on the Street that the seven-year period beginning April 1992 has been something investors have preferred to completely forget.
There was little investor interest and not much by way of market returns.Liberalisation had thrown the Indian markets open to foreign institutional investors by 1993, but their interest here was nothing to write home about.
It was only in mid-1999, on the back of the boom in technology companies, and hence technology stocks, that signs of some interest started emerging.
On October 8, 1999, the Sensex breached the 5,000 barrier and by February 11, 2000, it flew past 6,000.
Following the tech boom came the tech bust in 2000-01.The tech bust preceded the second major stock market scam, called the Ketan Parekh scam. Turn to Page 22
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