Today we going to talk about what is Sensex and Nifty, and how they work and calculated. And what is the difference between SENSEX & NIFTY (SENSEX V/S NIFTY)?
Sensex and Nifty both are the benchmark index of India. There are thousands of companies in India and, tracking every single stock that is not easy. Therefore, a market index plays a very important role. So, Sensex and nifty both are important indicators that are used to measure market behavior.
There is stock trading in the country is done through NSE and BSE.
What is Sensex?
- The full form of Sensex is a Sensitive Index. The Sensex is an index of BSE (Bombay Stock Exchange).
- Sensex is used to view the fluctuations of the BSE stock exchange.
- In the SENSEX, the top 30 companies of the BSE are indexed, which is selected from 13 different sectors.
- These top 30 companies are the largest company in its one sector, which has a lot of value in the market.
- SENSEX is India’s oldest stock index and it was created in 1986 and is called a sensitive index.
How Sensex is become & how it is work?
- The Sensex becomes the committee of the stock exchange, in which the top 30 companies are selected from 13 different sectors of the BSE.
- These are selected based on transactions of their shares, in which it is seen how much of these company’s shares were bought and sold in a year.
- There are thousands of companies listed on the stock exchange of BSE, so this process of choosing Sensex goes on like this and many times of companies are selected and connected to Sensex.
- The SENSEX gives you a pattern of advantages and disadvantages happening on the BSE stock exchange.
On this basis of this, 30 major companies are included, and then by counting the price of their shares it is decided that the Sensex is decreased or increased.
How Sensex is calculated?
Sensex’s calculation always depends on their top 30 companies. Here the calculation of Sensex is done based on the opening price and closing price of their company.
The SENSEX shows you the Entire movement of the BSE, all information given about the fluctuation happening in the exchange, and the change in the stock Exchange.
Features of SENSEX
What is Nifty?
- Nifty is an index of shares of major companies listed on the NSE(National Stock Exchange). NSE is located in Delhi and It was started in November 1994.
- The National Stock Exchange controls the stock market in India. Nifty is a group of two words, national and fifty.
- More than 1600 companies are registered in NSE. The 50 largest, financially strong, and highest market cap companies from 12 different sectors of the country are selected to be indexed in nifty.
- The nifty began in the year 1994, while it’s base year is 1995.
- The base value of nifty is 1000.
How Nifty is calculated?
The Nifty is calculated on the basis of free-float market capitalization that means, that the company’s free-float market capitalization is considered when calculating indexes. and shares in the index are given weight. Nifty is calculated the same as Sensex calculation and some terms are converted to nifty.
Which is like this-
- When calculating Nifty, the base year 1995 and base value 1000 are used.
- Nifty calculates the 50 highest market cap companies from 12 different sectors of the country.
Features of Nifty
How does Nifty work?
The main function of Nifty is to give information about the 50 companies that are listed and the stock market. The nifty index is used to find out how the company is doing work.
If the company benefits, then increase the share price of the company, and when it increases the share price of the listed company, then also increases the nifty share price.
If the company is losing profit or not, it affects the company’s shares price, and when decreasing the share price, then the nifty share price will also fall.
You can also see Nifty future chart to see nifty’s performance.
Difference Between SENSEX and NIFTY