New Delhi, Nov 13: Monday's sensex could shock you out of the slumber forced by bears. You could wake up to a sensex that would have lept past the 3100-mark overnight. But don't be shocked if the index is close to the 3,200 level. You still may not find any recharged bull around Dalal Street. Take a closer look an you will find four new scrips doing all the difference to the index, which has for long been struggling to touch the 3000-mark. Thanks to the new composition of the BSE-30 share index, on Monday the index, which closed at 2973 today, could read 3144. With effect from Monday Infosys Technologies, NIIT, Castrol and Novartis will be included in the index in place of Sail, Arvind Mills, GE Shipping and IPCL. These scrips were included to restructure the index to make it more broad-based.With the inclusion of these four stocks, the market capitalisation of the Sensex would increase from Rs 1,51,224.54 crore to Rs 1,59,910.96 crore (based on November 13, 1998 prices) representing 34.5 per cent of BSE'smarket cap. Adjusted for these new scrips, the today's sensex closing would be some were around 3144.28 instead of 2973.49 points.
The new scrips will have a total weight of 8.45 per cent while the out going had a weight of only 3.19 per cent. Thus it would mean that the weight of the other 26 scrips in the sensex would come down proportionately. For example market heavy weight Hindustan Lever, which was enjoying a weight of 21.33 per cent, will now have a weight of 20.17 per cent. Similarly, the weight of ITC and RIL will come down to 11.83 and 7.49 per cent from 11.18 and 7.09 per cent respectively. Out of the new entrants, Castrol India will have the highest weight of 2.49 per cent followed by Infosys (2.4 per cent).
Although Infosys has lowest equity (Rs 16.02 crore) among the four but due to its high price of Rs 2392.60 it would enjoy higher weight. Tata Power will have the lowest weight in the new Sensex of only 0.64 per cent, earlier Arvind mills used to have the lowest weight of 0.22. Therevised sensex has attributed the highest weight to the consumer non-durables sector -- 21.68 per cent with a Rs 34,663.5 crore market cap. Assuming that prices of all other scrips remain at the same level a 5 per cent increase in the prices of the new entrants would see the sensex zooming to 3171.7 level.
Last month the index committee of the BSE decided to give a wide representation to the four market favourites at its meeting. The need to have a broad-based and liquid index was felt with index futures on its way. The revised index, which is a barometer of 15 industry representatives, has assigned the food and beverages sector a weight of 12.75 per cent with the market cap at Rs 21,113 crore, healthcare industry has been given a weight of 4.70 per cent , consumer non-durables (21.74 per cent), auto industry (7.92 per cent). IT accounts for a weight of 4.33 per cent, oil and gas has a weight of 6.22 per cent, petrochemicals 6.70 per cent , telecom accounts for a 7.71 weight, power stands at 1.98 per centand hotel at 1.10 per cent (Rs 7,657crore).
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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