INDICES - Sensex and Nifty
There are two major Stock Exchanges – BSE & NSE.
Stock Exchange is the secondary market where the stocks are brought & sold. Sensex and Nifty are the Indices of the Stock Exchange. Sensex is the Indice of Bombay Stock Exchange and Nifty is the Indice of the National Stock Exchange.
Why the Indices are made?
Because there are thousands of companies registered in the Stock Exchange and it is difficult to track all the companies, so Indices are made.
You can track the market movement by seeing Nifty and Sensex, whether they are up or down, Green color indicates they are UP and Red color indicates they are DOWN. Nifty and Sensex consist of all good performing Sector’s companies.
SENSEX consist of Top 30 Companies on the basis of Market Capitalization and NIFTY consist of Top 50 companies on the basis of Market capitalization, in NIFTY Top 30 companies are of SENSEX and rest other next Top 20 companies, it is also called NIFTY FIFTY.
HOW IS MARKET CAPITALISATION CALCULATED?
Market Capitalization formulae is,
PRICE OF ONE SHARE X N.O OF SHARES = Market capitalization.
Stock Indices also tells about the Country’s Financial Health