S&P BSE Consumer Durables

As an Indian investor, you must be familiar with terms like BSE Sensex, BSE 100, BSE 200, BSE 500, BSE All Cap index, etc. These are comprehensive indices created by the BSE to keep track of the overall movements in the stock markets. These indices comprise the top stocks from various sectors to draw a holistic picture of the economy.

Although these indices provide a substantial view of the markets, their use is restricted to the comprehensive view of the major stocks. To better understand the economy, it is important to study the role of different sectors individually before forming any opinion. To tackle this concern, the BSE launched sector indices like the S&P BSE Consumer Durables in 1999, which were a spin-off from the BSE 500 index.

The consumer durables sector is related to goods of daily use that can have a long life. For example, electronic appliances like TV, fridge and washing machine. Usually, the items are expensive and durable. Hence, the name consumer durables. The companies involved in manufacturing or selling consumer durables that also form part of the BSE 500 index are included in the S&P BSE Consumer Durables index.

The number of stocks included in the index is intended to be kept around 10, but the total free-float market capitalisation of these companies should at least amount to 90% (+/-2%) of the total market cap of the consumer durables sector. Hence, the number of shares can vary. Presently, the total number of constituents in the BSE Consumer Durables is 12.

By studying the S&P BSE Consumer Durables Share Price, investors and analysts can understand the consumption trends, which also help to forecast the economy’s future. If the BSE Consumer Durables index rises, it indicates that consumers have enough disposable income and discretion to buy durable goods.