Nifty and Sensex and two stock market index given to the top performing, financially established and stable companies where most of the individuals prefer investing.
NSE and BSE: A Glimpse
Shares can be defined as the unit of any firm and its capital which gives ownership to the individual. Share market can be described as buying and selling of shares. Basically you invest your money in it and depending upon the market scenario you either gain or lose money in it.
The main national share market of India is Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Individuals trade in the stocks listed on these both by opening a demat and trading account with a financial institution or financial consultant.
NSE was founded in the year 1992 in Mumbai and is the largest stock exchange. Whereas BSE was founded in the year 1875 and is the oldest stock exchange of Asia.
NIFTY:
Nifty is an abbreviation of National Stock exchange Fifty consists of 50 best companies out of the 1600 companies listed in the stock exchange. These are the largest companies of India and also consists of liquid Indian securities. A true representation of the Financial markets, capturing roughly 68 percent of its float-adjusted market cap!
It is also diversified into 24 sectors of the economy and is also ideal of derivatives trading. It is owned and managed by NSE Indices Limited and it was earlier managed by India Index Services and Products Limited (IISL). For the estimation of the benchmark per float-adjusted market valuation approach, the minimum value of the Nifty 50 is 1000, and 1995 is the base year.
Some of the companies listed in Nifty 50 are: Reliance Industries ltd, Tata group, HDFC Bank, ICICI Bank, Kotak Mahindra bank, Infosys, Hindustan Unilever (HUL), etc.
Movement of Nifty:
- If the valuation of Nifty goes up, it means that the key stocks listed in Nifty has increased in value. Hence, the price of the stock has improved.
- If the valuation of Nifty went down, it means that the key stocks listed in Nifty has decreased in value. Hence, the price of the stock has reduced.
SENSEX:
Sensex is an abbreviation of Stock Exchange Sensitivity Index and it was the term given by Deepak Mohoni, who was a stock market analyst. It consists of 30 best companies listed in the Bombay stock exchange (BSE). The Sensex is a market-weighted economic indicator that contains stocks from the top 30 well-known firms, focused on their success and economic security.
These 30 companies are very well established, financially stable and are the most invested in by the individuals. It has its base as 100 and is calculated by free-float market capitalization.
Sensex is older than nifty and shows a greater impact in the Indian economy.
Movement of Sensex:
- If the valuation of Sensex goes up, it means that the key stocks listed in Sensex has increased in value. Hence, the price of the stock has improved and so the individuals start buying more stocks.
- If the valuation of Sensex goes down, it means that the key stocks listed in Sensex has decreased in value. Hence, the price of the stock has reduced and so the individuals start selling more stocks.
So, that was about Sensex and Nifty! What do you think about the two stock market indices? Do share your queries thereon.
SENSEX is the top 30 companies in the stock market, and NIFTY are indices that refer to the top 50 companies. Nifty has two things: the top 50 companies and another NIFTY BANK, where the top 50 banks are listed. Investors and traders can easily trade in these two indices through their stockbrokers.