Before understanding about Nifty and Sensex, one needs to understand the Indian stock exchanges.

Before understanding about Nifty and Sensex, one needs to understand the Indian stock exchanges. The 2 major stock exchanges in India are the Bombay Stock Exchange and the National Stock exchange

Bombay Stock exchange is located on Dalal Street in Mumbai. It is Asia’s oldest exchange and was started in the year 1875. BSE is one of the world’s fastest stock exchange with a median trade speed of 6 microseconds. More than 5500 companies are listed on the bse.

Since there are so many companies listed on a stock exchange, it is virtually impossible to keep track every single stock to evaluate the market performance at a time. Hence a smaller sample size is chosen which is indicative of the whole market. This small sample is known as an index which helps in the measurement of the value of a section of the stock market. The index is calculated from the prices of the selected stocks.

Sensex which is also called BSE 30, is the market index which consists of 30 properly established companies which are financially sound which are listed on Bombay Stock Exchange. These 30 companies are selected on the basis of free float market capitalisation. They are from various sectors. The base year is 1978-79 and the base value is 100.If the Sensex comes down, it means that most of the companies listed on BSE, have fallen down and vice versa

For example if the Sensex is at 30000 and the next day it falls to 28000, it means that majority of the 30 companies have fallen as a result of which the overall sentiment is weak in the market.

The National Stock Exchange is the leading stock exchange of India. This was introduced to end the monopoly of BSE in the Indian market. NSE was established in 1992. It was the 1st exchange in the country to provide a fully automated screen based electronic trading system which offered easy facility to investors. NSE’s index Nifty 50 is used by investors in India around the world. It is a barometer of the Indian capital markets.

Nifty, also known as Nifty 50, is the market index consisting of 50 well established and financially sound companies listed on NSE. The base year is 1995, base value is 1000. Nifty is calculated using 50 large stocks which are actively traded on NSE. These 50 stocks are selected from more than 20 sectors.

This is a brief synopsis of Nifty and Sensex. Thank You for watching the video!