Differences between NIFTY & SENSEX
Differences between NIFTY & SENSEX
Introduction
In this article I will be discussing about what is NIFTY & Sensex and how they are different from one and another. Basically, these two are the stock market indices. These indices helps investors check the condition of the market prices of the stocks. They help monitor the changes in prices of stocks, either up and down and clarify the bullish and bearish behavior of the markets. As we talk about NIFTY, it is introduced by National Stock Exchange of India (NSE) in April 22 1996. NIFTY provides the data for the top 50 companies that are listed under NIFTY which are the free float shares which can be traded by individuals in the stock markets. On the other hand, SENSEX is the oldest indices, introduced by Bombay Stock Exchange (BSE) in January 2 1986. Here there is the data for only top 30 companies only, as compared to NSE which states 50 companies’ data. They are often referred to as blue-chip stocks. So, let’s dive back into our article to know more.
NIFTY
NIFTY comes with the word “National Stock Exchange” and Fifty, here fifty because it states Top 50 companies which are under National Stock Exchange (NSE). NIFTY issued by National Stock Exchange Of India which gives the list of top 50 companies based on market capitalization, liquidity and trading volume. These undergo changes according to the change in market conditions. NIFTY follows free flow market capitalization which offers weightage to the company through a higher public float. It plays an important role in helping investors and fund managers in deciding what is best for them and right to make an investment. Nifty has been owned by the IISL (Index Service & Products Limited) In India. IISL is owned by NSE as a subsidiary. Top companies that are been traded on NIFTY are YES Bank, Tata Motors, IndusInd Bank, SBI, Asian Paints, Bajaj Auto & More.
SENSEX
Sensex is also known as S&P BSE SENSEX. It stands for “Sensitive Index” and commonly known as BSE SENSEX. This indices has been maintained and founded by the Bombay Stock Exchange (BSE). This is one of the most important stock exchanges in India. Apart from that it is a market capitalization-weighted index which means the components of the index are weighted based upon the total market value of their shares. It includes different companies from vast sectors including finance, healthcare, technology, industry, consumer goods etc. SENSEX provides the data of the top 30 companies from various sectors from the Indian Stock Markets that are selected by SENSEX itself. It helps investors from different backgrounds to decide and make wise decisions when it comes to picking up right stocks of the right listed company. There are several investment options that you can trade with SENSEX, they are index funds, index derivatives, Exchange-Traded Funds, Bonds, Futures & Options & many more.
Now let’s get started with the key differences between NIFTY & SENSEX
Sensex
1. The SENSEX serves as the primary benchmark index for the Bombay Stock Exchange.
2. Introduced in 1986, it holds the distinction of being India's most ancient stock index.
3. The name "Sensex" is a fusion of "sensitive" and "index."
4. This index consists of the 30 leading companies listed on the BSE.
5. It encompasses businesses from an extensive range of 13 distinct sectors.
6. The index's calculation employs a foundational value of 100.
7. For the computation of the SENSEX, the reference year is set as 1978-1979.
NIFTY
1. The Nifty serves as the primary benchmark index for the National Stock Exchange.
2. Introduced in 1996, the Nifty is a comparatively more recent addition to the stock index landscape.
3. The name "Nifty" is a combination of "national" and "fifty."
4. This index comprises the top 30 listed companies in the NSE.
5. Unlike the SENSEX, the Nifty is more extensive, encompassing companies across 24 diverse sectors.
6. The index's calculation employs a foundational value of 1000.
7. When calculating the Nifty, the base year used as reference is 1995.
Conclusion
After reading this article we now know about different kinds of indices available in Indian Stock Exchanges – BSE & NSE respectively. You will get to know the functionality of each of them which includes when they are founded and what type of stocks you can trade on them and more important details. But before investing you must be aware of proper methods of trading, which includes properly reading the guidelines and doing market analysis by monitoring statistical bar graphs and charts. Also apply a proper risk management strategy to avoid harmful losses.
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