What is Nifty and Sensex
Sensex -
The Sensex is basically a stock market index of 30 companies who are fundamentally strong and financially sound listed on BSE (Bombay Stock Exchange).It was founded on 1st January 1986. Sensex full form is Stock Exchange Sensitive Index and in this 30 companies which are some of the largest and also actively traded stocks, are representative of various industrial sector of Indian economy.
How Sensex is Calculated-
To ensure that it reflects current market conditions, the BSE reviews and modifies its composition. Using a free float capitalisation method, a variation of the market capitalization method, the index is calculated.
The float, or readily trading shares of a company, is used instead of the outstanding shares. Floating capital implies total capitalization less directors' shares.[3] According to free float capitalization methodology, index levels are tallied based on the free float market values of 30 constituent stocks.
By dividing the share price by the number of shares issued by corporate actions, such as the replacement of scrips, one can calculate a company's market capitalization. From June 1990 to the present, the index has climbed by a factor of more than 25. The S&P BSE SENSEX's long-term rate of return is calculated using data going back to April 1979 at an annual rate of 18.6%.
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What is Nifty -
Nifty is basically a market Index which was introduced by the NSE (National Stock Exchange). Nifty 50 is basically a benchmarked index which showcase the top 50 stocks which is traded in the stock exchange.
These stocks are from 12 different sectors of the Indian economy which includes information technology,financial services,telecommunications,cement,automobiles,metal etc.
It follows the trends and patterns of blue chip companies which are the largest and fundamentally the strongest.
When was nifty established? It was on 21st April 1997 and nifty full form is National Stock Exchange Fifty and it was initially calculated on a full market capitalisation method but on 26 June 2009 it was changed to free float methodology.
Sensex vs Nifty -
Now lets discuss what is the difference between nifty and sensex -
Parameters
Sensex
Nifty
Ownership
Sensitive and Index
NSE subsidiary, IISL
Base Number
100
1000
Number of shares
Top 30 companies
Top 50 companies
Number of sectors
13
24
1. Sensex is derived from 'Sensitive Index', while Nifty is derived from 'National Fifty'.
2. Nifty is operated by India Index Services Products Ltd. (IISL), a subsidiary of National Stock Exchange (NSE), while Sensex is operated by Bombay Stock Exchange (BSE).
3. Sensex consists of 30 stocks selected from the top 30 companies, while Nifty consists of 50 selected stocks from the top 50 companies.
4. Nifty's base index value is 1000, while Sensex's base index value is 100.
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