SENSEX is the mirror of the share market

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SENSEX, as we all know has a very important role to play in the entire financial scenario of a developing country like India. Many a times, in fact it has been regarded as the index that is used to measure or rather project whether the financial position of the very many shares listed in the stock exchange is sound or not. In other words, it is used as a guide to the investor and thus reflects the true and fair position of the values of the shares and stocks listed in the Stock exchange. Due to the reason that the SENSEX is used to reflect the true and fair view of the values of all the shares and stocks of the companies listed in the Stock exchange, many a times it has been said that the  SENSEX is the mirror of the share market.

What does a mirror do or what is the main purpose behind the use of a mirror?
A mirror, as we all know, it is used to reflect the true picture and that is exactly what a SENSEX does. The SENSEX is used to reflect the true and fair view of the values of the various stocks and the shares that are listed in the Stock exchange. As such, it is regarded as a mirror. However it is of utmost importance to put light to the fact here that the SENSEX is only an index of the shares and the stocks listed in the Stock exchange.

SENSEX is not simply an instrument that we use to invest to make our investment decision but rather an index:
In other words, what we mean to put forward here is that the SENSEX is not to be viewed as an instrument that tells us or rather decide for us the securities that we should invest our hard earned money in. By the term securities we are here referring to the various shares, stocks, debentures, bonds, government securities, stock options, so and so forth of the numerous companies that are listed in the stock exchanges. However, it is again worth mentioning here that the SENSEX deals exclusively in the securities that are listed in the Stock exchange.

SENSEX the true and fair projector of the position of the securities in the Stock exchange:
From the above discussions it has already been clear that the SENSEX is referred to as an instrument that can be used to project the true as well as the fair picture as regard to the value of shares and stocks of the companies that are listed in the stock exchange. However, it has not been defined clearly above what we exactly mean by the term the value of the shares and stocks.

It is essential that we put light to certain related terms as regard to the SENSEX before we proceed further:
Thus, before we proceed further onto our discussion relating to the SENSEX being regarded as a mirror, it is essential that we put some light to the very concept of the shares and the stocks and the values that are used in relation to it. We all know what the shares and the stocks of a company exactly stand for and what are their importances from the company’s point of view.

What do we exactly mean by the term values of the shares and the stocks:
However, still it is here worth mentioning that the stocks and the shares have certain values attached to it. The values that are inherent to the stocks and the shares are known as the market price of the shares and the stocks. The price of the shares and the stocks are never static, that is, in other words, they are highly dynamic in nature. They keep changing all the time and as such we would not entirely be wrong in saying that it changes several times in a particular day from the time the stock market opens till it closes down. SENSEX projects these values and thus SENSEX is the mirror of the share market.

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