What is Sensex and Nifty?

What is Sensex and Nifty? (The Basics of Indian Stock Market Indices).

If you follow stock market news, you’ve probably heard terms like “Sensex is up 500 points today” or “Nifty closed in the red”. But what exactly do these terms mean? 🤔 Let’s break it down in simple words.

1. What is a Stock Market Index?

A stock market index is like a report card of the stock market.

  • It measures the performance of a group of selected companies.

  • Helps investors understand whether the market is moving up (bullish) or down (bearish).

👉 Think of it as a thermometer 🧾 that shows the overall health of the market.

2. What is Sensex?

  • Full Form: Sensitive Index.

  • Launched: 1986 by the Bombay Stock Exchange (BSE).

  • What it Tracks: The top 30 companies listed on the BSE, chosen based on market size, liquidity, and industry representation.

📌 Example: Companies like Reliance Industries, TCS, HDFC Bank, Infosys are part of the Sensex.

👉 If the Sensex goes up, it means these top 30 companies are generally performing well.

3. What is Nifty?

  • Full Form: National Stock Exchange Fifty (Nifty 50).

  • Launched: 1996 by the National Stock Exchange (NSE).

  • What it Tracks: The top 50 companies listed on NSE across 14 sectors of the economy.

📌 Example: Companies like ICICI Bank, HUL, Bajaj Finance, Wipro are part of the Nifty.

👉 If the Nifty rises, it shows the broader performance of 50 leading companies.

4. Sensex vs Nifty: Key Differences

AspectSensexNifty
ExchangeBombay Stock Exchange (BSE)National Stock Exchange (NSE)
Launch Year19861996
No. of Companies3050
RepresentationNarrow (top 30 companies)Broader (top 50 companies)

5. Why Are They Important?

  • Help investors track market trends 📊.

  • Used as a benchmark to compare mutual funds and portfolio performance.

  • Represent the overall economy’s mood (growth or slowdown).



Gowtham's Note:

  • Sensex = 30 top companies on BSE.

  • Nifty = 50 top companies on NSE.

  • Both are barometers of the Indian stock market.

So, next time you hear, “Sensex crossed 70,000” or “Nifty at 22,000”, you’ll know that it reflects the performance of India’s biggest and most trusted companies.

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