What is Sensex and Nifty

Sensex and Nifty

In India The BSE ( Bombay Stock Exchange ) and NSE ( National Stock Exchange ), which are the two main stock exchanges in India, The stock exchange is a market where the stock buyers and stock sellers have a transaction, Nifty and Sensex are both these Indices, The Sensex is the Main Index of Bombay Stock Exchange, The same Nifty is the main index of the National Stock Exchange, More than 5000 companies are listed on the Bombay Stock Exchange, And there are over 1600 companies listed on the National Stock Exchange, And it is impossible to track all these companies to know the market, So the index was created, There is no need to track all the companies to know the stock market in India, By looking at the Sensex and Nifty, you can know that the market is up or down.

When there are Sensex and Nifty up i.e. in green color then we say the market is up, And when the Sensex and Nifty are down or are in red color then we say the market is down, As we all have heard that blood reports give health information, Sensex and Nifty share the health of the stock market in the same way, If the Nifty and the Sensex are on the green mark today, then it means the Nifty and the Sensex are above their yesterday's trade value, Similarly, Sensex and Nifty are on the red mark, then it means that it is below tomorrow's close trading value.

The word Sensex is sensitive and index is composed of these two words, the first four letters of the sensitive word and the last two letters of the index word are added to the word Sensex, The Sensex includes companies with 30 well established and good track record of different sectors, This means that the movement of the Sensex depends on the movement of these 30 companies, The Nifty word National and Fifty are made up of these two words; Fifty because the Nifty is comprised of 50 companies, Nifty includes companies with 50 big well-established and good track records of different sectors, which means that the movement of Nifty is dependent on the movements of these 50 companies.

Nifty, which is the main index of NSE, is also known as the name of Nifty Fifty, If speaking in simple language, the movement of Sensex is dependent on 30 companies involved in the Sensex, The Nifty Movement is dependent on the 50 companies involved in the Nifty, The Nifty and the Sensex comprise of different sectors, large, well established and the leader of their own sector companies, And these companies are selected from almost all different sectors, In this way, different sectors are also covered in Nifty and Sensex, That is why the performance of Sensex and Nifty is considered as the performance of the stock market.

There are many other Indices In the stock exchanges, There are almost all different sector Indices on NSE and BSE, So if you only have to track the banking sector, then you can know about the banking sector by looking at BSE Index BANKEX or by looking at NSE Index Bank Nifty, Small Caps and mid-cap companies on the stock exchange are also separate Indices, Such as S&P BSE small caps, S&P BSE Midcap, nifty midcap fifty, etc. Where you can find out about the smallcap and the mid-caps.

Nifty Sensex and the rest of the indices are also used as benchmarks, You can find out if you have received good returns on your investment by comparing with Nifty and Sensex, For example, the Nifty has given 35% returns in the last 3 years i.e. in the last 3 years Nifty has increased by 35%, The Sensex has given about 40% returns in the last 3 years i.e. in the last 3 years the Sensex is increased  40%, So if your investment has given more returns compare to Sensex or Nifty in the last 3 years, then you can say that your investment gives you good returns, If your investment has given low returns than it has been in the past 3 years, then you can say your investment did not give you good returns.

In the same way, if you have invested in the banking sector, you can see by looking at BSE indices BankEx and NSE indices Bank Nifty by comparing your returns with its investment returns, you have received good returns on your investment or not, If you have invested in midcap stocks, then you can compare your return by midcap indices, All you have to do is pay attention to the Nifty and the Sensex that they are increasing or decreasing, If a stock is consistently performing poorly in the Nifty and Sensex, then the Nifty and the Sensex can remove that stock and replace it from another well-established stock, And this decision takes the stock exchange itself.

For example, in 2016, Nifty took Cairn India, Vedanta, PNB out of their place and replace with Aurobindo Pharma, Bharti Infratel and Eicher Motors.

Hope you enjoyed this post if you have any questions relating to this post or from the stock market, you can ask us any questions by commenting in the comment box.
What is Sensex and Nifty What is Sensex and Nifty Reviewed by Yogesh Dhawan on August 07, 2019 Rating: 5

No comments:

Powered by Blogger.