Financials’ Domination Of Sensex Gets Bigger

The weight of banking and financial services sector in the Sensex is now at its highest, rising twofold in the last decade. The share of pharmaceuticals, telecom and capital goods has declined.

Here’s how the benchmark S&P Sensex Index looks from today.

BFSI’s Rising Weight

The index will now feature two more bank stocks—IndusInd Bank Ltd. and Yes Bank Ltd.—taking the total count of banking and financial services companies to eight. The weight of banking, financial services and insurance sector is now at 40.1. It includes private and public-sector banks and non-bank lenders. There is no insurance company in the index.

Healthcare’s Share Falls

The share of pharmaceuticals sector has fallen to its lowest in seven years. Only two drugmakers— Sun Pharmaceutical Industries Ltd. and Dr. Reddy’s Laboratories—remain as Cipla Ltd. and Lupin Ltd. will make way for two private lenders. It reflects the challenges faced by Indian drugmakers, including increased competition, pricing pressure, and regulatory hurdles in their key U.S. market.

Staying Put

Of the 31 stocks in sensex stocks, 18 have remained unchanged in the last decade. Their weight in the index has declined by about 5 percentage points to 78.7 percent.

The Loners

Capital goods and telecom sectors’ weight has fallen to an all-time low of 4.5 percent and 1.8 percent, respectively. They are represented by one stock each—Larsen & Toubro Ltd. and Bharti Airtel Ltd.

Stable Defences

The share of the defensive consumer sector has largely been stable. It has been in the range of 11 to 13 percent in the last six years.

Volatile

The oil and gas, which has two components in the index, has been very volatile. The sectors’ weight has now halved to 10.9 percent compared to March 2009.

Missing

The index had no representation from the cement and the real estate sectors for at least six years. A cement company was last in the index in 2009-10 and real estate in 2011-12.