What is Sensex and Nifty?

In India, the “Bombay Stock Exchange” means (BSE) and  The “National Stock Exchange” means (NSE) are the two main stock exchanges. 

A stock exchange is a market where shares are exchanged between buyers and sellers. Both nifty and sensex are indexes. The Sensex is the Bombay Stock Exchange Index and the Nifty is the National Stock Exchange Index.  

More than 5000 companies are listed in BSE and more than 1600 companies are listed in NSE. Because it is not possible to study all these companies to know the market situation, an index has been created. It is not necessary to study all the companies  of the stock market in India. Just by looking at Nifty and Sensex you can know what is the stock market situation in India. 

When Nifty and Sensex are up, it is green, we say the stock market is up. When the Sensex and Nifty are down, that is in red, we say the stock market is down. I mean, as I told you earlier, a patient’s blood report gives information about his health as well as Nifty and Sensex Indian stock market. Nifty and Sensex also provide information on the health of the Indian stock market. Today, Nifty and Sensex are in Green, which means that Nifty and Sensex are above yesterday’s Closing, and Nifty and Sensex are in Red, which means that they are Closing yesterday. Is lower than. 

The word Sensex is a combination of the words Sensitive and Index. The first four words of Sensitive and the last two words of Index form the word Sensex. There are 30 companies listed in the Sensex. The movement of Sensex depends on the movement of these 30 companies. Nifty also combines the words National and Fifty to form the word Nifty 50. There are 50 companies in the Nifty 50 Index. 

Nifty and Sensex include large companies from different sectors. The performance of Nifty and Sensex is considered to be the performance of Indian stock market. 

The stock market also has indexes in addition to this. NSE and BSE have different indexes from all sectors. If you want to know about the banking sector, look at the BankNifty Index in the NSE and you can understand the situation of the bank. The stock market also has small cap and mid cap indices like S&P BSE  Small Cap, S&P BSE Mid Cap and Nifty Mid Cap Fifty etc. Here you can understand the performance of small cap and mid cap. 

If you don’t know what small cap, mid cap and large cap are, we will see in the next blog. 

Sensex and Nifty are calculated by FREE FLOAT MARKET CAPITALIZATION. The 30 companies in the Sensex have an average of FREE FLOAT MARKET CAPITALIZATION. We need to keep an eye on Nifty and Sensex. We have to keep an eye on whether the Nifty is going up or down. 

If any stock between Nifty and Sensex is performing poorly, then Stock Exchange removes that Stock from the Index and replaces it with another Stock and this decision is taken by Stock Exchange itself. 

In 2016, Carin India, Vedanta, PNB were removed from Nifty50 and Aurobindo Pharma, Bharti Infratel, Eicher Motors were added to Nifty 50. 

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