How weight is calculated of Stock in sensex ?

 Hello friends lets understand 

How  weight is calculated of Stock in sensex ?

Lets take a example of stock is below 

Reliance Industries Limited (RIL) 

To calculate RIL’s weight in the Sensex, we need to determine the company’s free float market capitalisation, which is the market capitalisation adjusted for shares that are not available for trading. Let’s assume that RIL’s free float market capitalisation is INR 14.0 trillion.

Assuming the base market capitalisation of all 30 companies on the Sensex is INR 158.91 trillion, we can calculate the weight of RIL in the index as follows:

RIL weight = (Free float market capitalisation of RIL / Total free float market capitalisation of all 30 companies on Sensex) * 100

RIL weight = (INR 14.0 trillion / INR 635.68 trillion) * 100

RIL weight = 2.20%

We can calculate the contribution of the company to the Sensex’s value using RIL’s weight in the Sensex,  RIL’s contribution to the index would be 2.20% of 50,000 points, which is 1,100 points if the Sensex value is 50,000 points and RIL’s weight is 2.20%.

Points to take

In these sense if market have to move up contribution of Top stocks is much needed 

keep  reading & keep growing 

wise investing 

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