Sensex, more than just first among equals | Economic Times

India’s first stock benchmark, the BSE Sensex, has been among the top outperformers across major global markets since its inception in October 1986. The index has generated an annual compounded return of 13.52 per cent in the past 35 years as against 10.97 per cent of the Nasdaq, 7.9 per cent of Hong Kong’s Hang Seng and 7 per cent of Germany’s DAX. In absolute terms, the Sensex has gained 8,371 per cent since 1986 compared with 3,719 per cent of the Nasdaq, 1,649 per cent of the Dow Jones Industrial, 1,330 per cent of Hang Seng. Indonesia, an emerging market peer, performed better than India in this period. “Indices, like the Sensex, have been observed to grow at an amplified rate versus the GDP,” said Anand Dalmia, co-founder, Fisdom. “India’s GDP grew from $249 billion in 1986 to $2.9 trillion last year. As the government envisions a $5 trillion economy over the next five years, indices can be expected to surge significantly in the next couple of years.” Sensex, the index of the 30 largest stocks, made its debut in 1986 with 1979 set as its base year. The country’s GDP contracted by more than 5 per cent in 1979, the first time after Independence. The GDP rose since then for more than four decades. The outperformance happened despite the Indian market logging modest returns last five years. “India has been a market with extremely poor returns for the last five-six years at 5-6 per cent, which is lower than the historical average of 15 per cent,” said Shankar Sharma, ViceChairman, First Global. 80397256