As the benchmark Sensex completes 40 years, BSE MD and CEO Sundararaman Ramamurthy says the index's enduring relevance lies in its ability to evolve with India's changing capital markets while remaining a trusted barometer of economic health. Speaking to ET Now, Ramamurthy emphasized that the longevity of any index depends on its construction methodology, periodic rebalancing, and ability to adapt to market realities.

Sensex: Four Decades of Market Leadership

Ramamurthy highlighted that Sensex has consistently evolved with global best practices, transforming into a free-float market capitalisation index with a transparent inclusion and exclusion framework. Despite tracking only 30 stocks, the index maintains significant market influence and broad sectoral representation.

"That is why Sensex continues to be the first reference point whenever markets move," Ramamurthy added, noting the index's broad sectoral representation ensures strong correlation with the wider market.

Strategic Index Business Acquisition

Explaining the strategic rationale behind BSE acquiring full ownership of its index arm by buying out the S&P Dow Jones stake, Ramamurthy said index administration is central to India's capital formation story. In a fast-growing economy like India, index investing and index-linked mutual funds serve as critical channels for retail participation in capital markets.

"Decision-making had to be faster and fully aligned with domestic market needs. That required management control to be in India," he explained. With Sensex now managed as a 100% BSE subsidiary, the exchange has greater flexibility to introduce new indices, respond to investor trends, and support long-term economic objectives.

Technology-Driven Turnaround Strategy

Ramamurthy credited BSE's turnaround over the past three years to a sharp focus on identifying market gaps, cutting inefficiencies, and investing in technology. "If you identify a gap and fill it, you earn your right to exist," he said.

The exchange's transformation involved several key initiatives:

• Cost optimisation and filling long-vacant positions
• Cultural change within the organisation
• Massive upgrade in trading infrastructure
• Enhanced derivatives processing capabilities

BSE's derivatives processing capacity has expanded dramatically, showcasing the exchange's technological advancement:

Regulatory Environment and Market Stability

On the frequent regulatory changes in the derivatives segment over the past year, Ramamurthy said India's regulatory framework is consultative rather than unilateral. "Evolution can be painful, but these changes were driven by investor protection and market quality, not disruption," he said.

While the broader derivatives market went through a phase of stabilisation, BSE benefited as a relatively recent entrant in index derivatives. "For us, the regulatory changes actually helped establish new products and gain traction," he noted.

Addressing concerns around uncertainty in derivatives regulations, Ramamurthy said clarity has improved significantly. "The intent is not to kill products or restrict participation, but to enhance awareness, protection and market depth. The regulatory environment today is progressive and constructive," he said.

Future Growth Outlook

As Sensex enters its fifth decade, BSE believes deeper index investing, improved market infrastructure, and collaborative regulation will continue to anchor India's equity markets in the years ahead. The exchange's focus on listening to market participants, addressing concentration risk concerns, and introducing differentiated products such as Sensex derivatives has been critical to its recovery and future positioning.

Indian equity markets delivered a strong performance with benchmark indices closing at record highs amid broad-based buying interest across banking, realty, metals and auto sectors. The Nifty 50 climbed to an all-time high of 26,340 during the session before settling at 26,328.55, while the BSE Sensex jumped over 740 points intraday before closing 573.41 points higher at 85,762.01.

FPI Buying Returns After Extended Selling Streak

Foreign Portfolio Investors (FPIs) broke their selling streak and turned net buyers, purchasing Indian equities worth ₹289.80 crore according to provisional data from the National Stock Exchange. This marked a significant shift after eight consecutive sessions of net selling by overseas investors.

The buying action coincided with the Nifty 50 touching its first all-time high of 2026. There was a major exodus of FPIs from the Indian market during the previous year, driven by decline in the rupee's value, with overseas investors net offloading shares worth ₹1.66 lakh crore during the calendar year.

Market Performance Overview

The equity benchmark indices demonstrated robust gains during the trading session, with steady domestic institutional inflows helping offset previous foreign selling pressure. The market capitalisation of the Nifty index jumped by ₹1.64 lakh crore during the session.

The Bank Nifty extended its upward move and scaled a fresh all-time high of 60,204 during the session, remaining a clear outperformer versus the Nifty in recent sessions. The Nifty logged its third consecutive session of advance, with the last record high previously touched at 26,325.8 points.

Sectoral Performance and Market Drivers

Sectorally, all indices ended in the green except FMCG, demonstrating broad-based market strength. Financial and energy stocks led the rally, with realty, PSU Bank, metals and auto sectors contributing significantly to the gains. According to Gaurav Garg, Research Analyst at Lemonn Markets Desk, optimism around an improving earnings outlook, healthy auto sales, positive bank business updates and expectations of reforms buoyed sentiment.

Metal stocks gained traction driven by the government's safeguard duty on some steel products to curb cheap imports from China and on rising commodity prices. Power-related stocks witnessed strong gains, with SJVN, IREDA, PFC, and REC featuring among the top performers.

Top Performers and Key Stock Movements

From the Nifty 50 basket, Coal India, NTPC, Hindalco, Trent, SBI and Jio Financial led the gainers, while ITC, Kotak Mahindra Bank, Nestle India, Shriram Finance and Bajaj Auto were major laggards.

Coal India was the top Nifty gainer after it allowed direct participation of foreign coal buyers from select countries in its e-auctions. ITC shares extended losses as investors worried about earnings pressure from higher taxes on cigarettes.

Broader Market Activity

Market breadth remained strong throughout the session, with 4,371 stocks traded on the BSE. Out of these, 2,772 advanced, 1,449 declined, and 150 remained unchanged. The number of stocks hitting a 52-week high stood at 185, while 83 stocks touched their 52-week low, indicating stronger bullish momentum overall.

Under the midcap index, Torrent Power, IREDA, NHPC, Dabur India and National Aluminium zoomed 5.00-6.00%, while among smallcap stocks, Ola Electric, JBM Auto, Anant Raj and CESC surged 5.00-9.00%. According to Vinod Nair, Head of Research at Geojit Investments, investor sentiment remained broadly constructive as attention turns to quarterly earnings, likely to guide near-term market direction.