What are Nifty and Sensex?
What is Nifty?
Nifty refers to National Stock Exchange Fifty and also known as the Equity benchmark Index of India- based National Stock exchange (NSE) which was introduced by NSE in 1996 and its other name are Nifty50 and CNX Nifty.
The major different points between Sensex and Nifty50 are the number of Stock each index contain. Nifty50 has stocks of the top 50 companies from the bulk of the 1600 companies that are actively trading in NSE including the 24 sectors.
These Fifty accounts nearly acquire 65% of the total free-flowing market capitalization of the Index and NEFTY shows the performance of the top 50 Stocks.
Nifty50 covers 14 sectors of the Indian economy Which also offers the investment manager exposer to the Indian market in a single portfolio between 2008 and 2012
How is Nifty50 Calculated in stock market
Nifty50 is calculated by taking the weighted value of all the 50 stocks listed on NSE and Nifty50 is based on the free-float market capitalization the index value is calculated using the market capitalization and reflects the value of the stocks connected to the base period
Index value= Current market value/Base market capital*Base Index Value
What is Sensex?
Sensex is also known as S&P and BSE index, Sensex is the benchmark Index of BSE which is also known as Bombay stock Exchange Sensex is the collection of India 30 largest and actively traded stock on the BSE.
The Sensex index composition gets renewed in June and December of every year. Sensex is the oldest Stock index of India and sensex was founded in 1986. Analysts use it to observe the Indian economic cycles and the development of particular industries.
Understanding the Sensex
The term Sensex was given by the stock market specialist Deepak Mohini Sensex is the combination of two words Sensitive and Index. The components of the index are selected by the S&P BSE Index committee based on 5 criteria
How the Sensex is calculated
Sensex is calculated by using a free flow capitalization method similarly to the market capitalization weighting method in which the companies are weighted according to their stocks total market capitalization of the index in the stock market. Sensex gives more weight to the larger company in its index