How are Sensex and Nifty calculated 1

Difference Between Nifty and Sensex

The stock market is a place where trading in securities issued by government, public corporations, and public companies takes place. It is common for both buyers and sellers to trade in financial instruments such as stocks, bonds, bonds, currencies, etc. In India, the two most popular stock exchanges are the BSE (Bombay Stock Exchange) and the NSE (National Stock Exchange) . Nifty of NSE and Sensex of BSE are the flagship of the two most popular stock markets in India.

A stock index that represents the entire stock market. The fluctuations in these indices correspond to the returns that investors achieve in the market. Nifty has 50 stocks in the index, while Sensex has stocks of 30 companies in its index. Read the article that introduced you to see the differences between the Nifty and Sensex.

Comparison table

Basis of comparisonAfloatSensex
Stands forNifty stands for national fifty.Sensex stands for Sensitive Index.
importanceNifty is an index of the top 50 companies listed on the National Stock Exchange (NSE).Sensex is an index of the top 30 companies listed on the Bombay Stock Exchange (BSE).
cover50 shares30 shares
LocatedNSE (Nifty) is located in New Delhi.BSE (Sensex) is located in Mumbai.
Founded in19951986

Definition of nifty

National Fifty, or Nifty for short, is a benchmark for the top 50 companies in more than 20 sectors, as reported by the public National Stock Exchange be traded intensively. It was founded and owned by NSE in New Delhi in 1995 India Index Services and Products (IISL) - a joint venture between CRISIL (Credit Rating and Information Services of India Limited) and NSE.

It is calculated using the weighted average market capitalization of 50 companies, on the basis of which the weights are assigned to each company. The base year is 1995 and the index value is 1000. Market capitalization denotes the total market value of the company, which is calculated by multiplying the total number of outstanding shares by the current market price per share.

Definition of Sensex

The sensitive index, abbreviated as Sensex, is a measure of the 30 most important companies from over 20 different sectors that make up the Bombay Stock Exchange from the public traded. It was founded in 1986 by BSE in Mumbai.

The index is calculated based on the free float market capitalization, which is calculated by multiplying the weighted average of some government and promoter stocks by the weighted average price. The base year is 1978-79 and the index value is 100. The free float market capitalization refers to the proportion of shares that are issued by a public company and actively traded on the stock exchange.

Key differences between Nifty and Sensex

  1. National Fifty is considered Nifty while the Sensitive Index is considered Sensex.
  2. Nifty is related to NSE while Sensex is related to BSE.
  3. Nifty is the indicator of top companies that are heavily traded on the NSE, while the Sensex is the indicator of top companies that are heavily traded on BSE.
  4. The Sensex is older than Nifty.
  5. The Nifty is in New Delhi, the Sensex in Mumbai.
  6. The main difference between Nifty and Sensex is that 50 companies are indexed in Nifty and 30 companies are indexed in Sensex.

similarities

  • Calculated on the basis of the weighted average market capitalization.
  • Includes major companies in various sectors of the Indian economy.
  • Both are indices
  • In connection with an exchange.

Conclusion

From the discussion above, the difference between the two is pretty clear, and both go side by side as they are related to the popular exchanges in the country. BSE is the oldest stock exchange with more than 4000 listings, while Sensex is the indicator that tracks 30 stocks based on the financially sound companies over the years. Similarly, Nifty is also an indicator of 50 well-established companies listed on the NSE.