Sensex and Nifty are two words that have become synonymous with stock markets in India. Even people who are not active stock investors are aware of Sensex and Nifty as stock market indices.
Published on 01 March 2023
OPEN A FREE* DEMAT AND TRADING ACCOUNT
IN 15 MINS*
But what is a stock market index? What are the different types of indices? What is the difference between Sensex and Nifty? Let’s find out.
What is a Stock Market Index?
You can understand an index as an indicator of a collection of similar items. With respect to the stock market, an index is a measure of the performance of a basket of securities. The stock exchange has thousands of listed stocks. Tracking and analyzing all of them is not possible. Hence, stocks with similar features are grouped together, and their performance is tracked using an index. Know More about Stock Market Indices
There are various types of stock market indices in India like:
Broad market indices: including large and most liquid stocks on the exchange. Nifty and Sensex are two broad market indices.
Sectoral indices: including stocks from a specific sector of the market like S&P BSE Power, Nifty Bank Index, etc.
Market-cap-based indices: including stocks of companies having certain market capitalization, such as Large-cap, Mid-Cap and Small-Cap.
Difference Between Sensex and Nifty
Sensex and Nifty are broad market indices and are also called benchmark indices. Sensex is of the Bombay Stock Exchange (BSE), and Nifty is of the National Stock Exchange (NSE). Here is the difference between Sensex and Nifty:
Particulars
Sensex
Nifty
Name
Sensex is also known as Sensitive Index
Nifty is also known as National Fifty Index
Owned By
Sensex is owned by the Bombay Stock Exchange (BSE)
Nifty is owned by Index and Services and Products Limited (IISL) – a subsidiary of the NSE
Base Price
The base price of Sensex is 100
The base price of Nifty is 1000
Base Year
The base year of Sensex is 1978-79
The base year of Nifty is 1995
How many stocks are in the index?
Sensex has the 30 most actively traded stocks on the BSE
Nifty has the 50 most actively traded stocks on the NSE
How many sectors are covered by the index?
Sensex covers around 13 sectors
Nifty covers around 24 sectors
Foreign Exchanges the Index is traded on
Sensex is traded on the stock exchanges of BRICS nations and the EUREX Exchange
Nifty is traded on the Chicago Mercantile Exchange and the Singapore Stock Exchange
Calculation of Sensex and Nifty
Here is the calculation of Sensex and Nifty:
Sensex The market capitalization of each company included in the index is calculated. This is then converted into free-float market capitalization by multiplying it by the free-float factor. The total free-float market capitalization of all 30 companies is then divided by the index divisor of 100.
Nifty The market capitalization of each company included in the index is calculated. This is then converted into free-float market capitalization by multiplying it by the Investable Weight Factor or IWF. The index value is determined by dividing the current market value by the base market capital of Rs. 2.06 trillion and multiplying the result by 1000.
Importance of Sensex and Nifty
Since Sensex and Nifty are indicators of the behaviour of the market prices of stocks, they provide a quick view of the overall sentiment of stock investors.
There are many Mutual Funds that benchmark the performance of their portfolio against these indices.
You can compare the performance of various stocks against Sensex or Nifty to assess their performance.
Sensex and Nifty can offer a quick view of the comparison of returns offered by stock markets as opposed to gold, debt, etc. Know More about Sensex & Nifty in Detail
Team Espresso
We care that you succeed
Bringing readers the latest happenings from the world of Trading and Investments specifically and Finance in general.
The base price is used to indicate growth, and the base year is the year with which the values of the other years are compared. In Sensex, the base year is taken as 1978-79, and the base price is 100. Let’s say that in 1980, if the Sensex was at 120, then the market grew at a rate of 20% from 1979 to 1980. Currently, Sensex is at 58,500. This means that the market grew at a CAGR of around 16-17%.
There are two simple ways of investing in indices like the Sensex and Nifty:
You can buy stocks in the same weightage as in the index.
You can invest in Index Mutual Funds.
To invest directly, you would need a sizeable corpus as most of the stocks included in these indices belong to the top-performing companies from various sectors and have high market prices. If you have a smaller corpus, then an Index Mutual Fund can be a good option.
Sensex is a broad-market index comprising of the 30 most actively traded stocks on the BSE. The companies are selected based on the free-float market capitalization. It is considered to be an indicator of the overall movement of stock prices in the BSE.
The base price is used to indicate growth, and the base year is the year with which the values of the other years are compared. In Sensex, the base year is taken as 1978-79, and the base price is 100. Let’s say that in 1980, if the Sensex was at 120, then the market grew at a rate of 20% from 1979 to 1980. Currently, Sensex is at 58,500. This means that the market grew at a CAGR of around 16-17%.
There are two simple ways of investing in indices like the Sensex and Nifty:
You can buy stocks in the same weightage as in the index.
You can invest in Index Mutual Funds.
To invest directly, you would need a sizeable corpus as most of the stocks included in these indices belong to the top-performing companies from various sectors and have high market prices. If you have a smaller corpus, then an Index Mutual Fund can be a good option.
Sensex is a broad-market index comprising of the 30 most actively traded stocks on the BSE. The companies are selected based on the free-float market capitalization. It is considered to be an indicator of the overall movement of stock prices in the BSE.
Sharekhan Comtrade Private Limited (TM) operates the web site accessible from the URL www.myespresso.com (the “web site”').
Sharekhan Comtrade Private Limited is committed to protecting your privacy and utilising technology that gives you the most powerful, safe, online experience that you can get anywhere else.
Sharekhan Comtrade Private Limited does, however, gather certain information that is provided by you to the Web Site. Sharekhan Comtrade Private Limited believes that by collecting this information Sharekhan Comtrade Private Limited is able to provide you with a personalised web experience, and to assist its own sales team and advertisers in efficiently reaching an appropriate audience.Sharekhan Comtrade Private Limited does, however, gather certain information that is provided by you to the Web Site. Sharekhan Comtrade Private Limited believes that by collecting this information Sharekhan Comtrade Private Limited is able to provide you with a personalised web experience, and to assist its own sales team and advertisers in efficiently reaching an appropriate audience.
Sharekhan Comtrade Private Limited requests the minimum information it believes necessary to achieve this goal.
The following discloses Sharekhan Comtrade Private Limited's information gathering and dissemination practices for the Web Site:
System Data:
Sharekhan Comtrade Private Limited uses your IP address to help diagnose problems with our server and to administer the web site. Your IP address is used to identify you and your shopping cart and to gather broad demographic information.
Registration Data:
The Web Site's registration form may require users to give us contact information (like their name, phone number and e-mail address), unique identifiers (like their PAN Number) and demographic information (like their pin code, age or income level). The Web Site uses customer contact information from the registration form to send the users information about Sharekhan Comtrade Private Limited and promotional material from some of Sharekhan Comtrade Private Limited's partners. The customer's contact information is also used to contact the visitor when necessary. Unique identifiers (such as PAN numbers) are collected to verify the user's identity. Demographic and profile data is also collected at the Web Site. We use this data to tailor the visitor's experience at the Web Site, showing them contents that we think they might be interested in, and displaying the contents according to their preferences. This information is shared with advertisers on an aggregate basis.
Links and Co-Branded Sites:
This site contains links to other Web Sites which are not necessarily been screened or reviewed by www.myespresso.com. Sharekhan Comtrade Private Limited is neither responsible for the privacy practices or the contents of such Web Sites nor shall be held answerable for the inaccurate, inappropriate or offensive data, material, information, products and services that may be viewed on those sites.
Sharekhan Comtrade Private Limited may operate a number of co-branded sites. Policies regarding information collection and sharing may differ on some of these co-branded sites. If you have any particular questions, you should check the privacy statement that appears on each co-branded site.
Order Forms:
The Web Site uses an order form for customers to request information, products and services. The Web Site collects visitors' contact information (like their mobile number or e-mail address), unique identifiers (like their PAN number) financial information (like their account or credit card numbers) and demographic information (like their pin code, age or income level). Contact information from the order form is used to send orders, information about Sharekhan Comtrade Private Limited, and promotional material from some of Sharekhan Comtrade Private Limited's partners to the visitors of the Web Site. The visitor's contact information is also used to get in touch with the visitor when necessary. Financial information that is collected is used to check the users' qualifications and bill the user for products and services. Unique identifiers (such as PAN numbers) are collected from Web Site visitors to verify the user's identity.
Surveys and Contests:
The Web Site's online surveys ask visitors for contact information (like their mobile number or e-mail address) and demographic information (like their pin code, gender, age or income level). The Web Site uses contact data from its surveys to send the user information about Sharekhan Comtrade Private Limited and promotional material from some of Sharekhan Ltd.'s partners. The customer's contact information is also used to contact the visitor when necessary. Users may opt-out of receiving future mailings; see the choice/opt-out section below. Demographic and profile data is also collected at the Web Site. The Web Site use this data to tailor its visitor's experience at the Web Site, showing them content that it thinks they might be interested in, and displaying the content according to their preferences. This information is shared with advertisers on an aggregate basis.
Sharekhan Comtrade Private Ltd run contests on the Web Site in which we ask visitors for contact information (like their e-mail address). Sharekhan Comtrade Private Limited uses contact data from its contests to send users information about Sharekhan Comtrade Private Ltd. and promotional material from some of our partners. The customer's contact information is also used to contact the visitor when necessary. Users may opt-out of receiving future mailings; see the choice/opt-out section below.
Third-Party Advertisement Servers:
Sharekhan Comtrade Private Limited engages the services of an outside advertisement company to display advertisement on the Web Site. These advertisements may contain cookies. While Sharekhan Comtrade Private Limited uses cookies in other parts of the Web Site, cookies received with banner advertisements are collected by the Advertisement company, and Sharekhan Comtrade Private Limited does not have access to this information.
Protection of your Data and Information:
The privacy and protection of your data and information provided to us is of vital importance. Sharekhan Comtrade Private Limited shall ensure to safeguard the security and confidentiality of any information you share with us. Any personally identifiable information of the customers obtained by us shall not be used or shared other than for the purposes to which the customers consents. However security and confidentiality of information cannot be guaranteed cent percent. Hence despite our utmost efforts to protect your personal information, Sharekhan Comtrade Private Limited and www.myespresso.com cannot warrant the security of any information you transmit to us through our online services. Such transmission of your personal information is done at your own risk.
Disclosure of Customer Information :
Sharekhan Comtrade Private Limited and www.myespresso.com shall not deliberately disclose customer's personally identifiable information to any unauthorized third person, save and except where such information shall be disclosed in good faith and for the purpose of law for the time being in force or to protect the rights and property of Sharekhan Comtrade Private Limited and www.myespresso.com.
Public Forums :
The Web Sites makes chat rooms, forums, message boards and/or news groups available to its users. Please remember that any information that is disclosed in these areas becomes public information and you should exercise caution when deciding to disclose your personal information.
Supplemental Information :
The Web Site supplements the information that you provide with information that is received from third parties.
The Web Site DOES NOT entice by the prospect of a special game, prize or other activity, to divulge more information than is needed to participate in the activity.
Further to the above, in light of the recently notified Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011. (Hereinafter referred to as the Rules)
The following shall be deemed to be sensitive information :
Password;
Financial information such as Bank account or credit card or debit card or other payment instrument details;
Physical, physiological and mental health condition;
Sexual orientation;
Medical records and history;
Biometric information;
Any detail relating to the above clauses as provided to body corporate for providing service; and
Any of the information received under above clauses by body corporate for processing, stored or processed under lawful contract or otherwise:
provided that, any information that is freely available or accessible in public domain or furnished under the Right to Information Act, 2005 or any other law for the time being in force shall not be regarded as sensitive personal data or information for the purposes of Rules.
Collection of Information:
Compliance with KYC guidelines as per SEBI / Exchanges / Or any other Act, law or regulation requiring the same and any internal KYC guidelines formulated by Sharekhan Comtrade Private Limited.
In order to provide enhanced trading experience to the client.
In order to provide any further information to be provided to regulators.
Such information may be collected in a manner that the client is always aware of the collection and purported usage of the same. The client shall have an option to withdraw consent to share the information. However such intimation shall be required in writing. Such intimation shall only be taken into account from the date on which the same is received. Sharekhan Comtrade Private Limited may choose to stop services to such a client in case such intimation is received. Such information shall only be used for the purpose it is collected.
Clients would be allowed an option not to disclose any information to be collected, provided the same is in compliance with regulatory requirements.
Disclosure of information:
Disclosure of sensitive information would be as per the terms agreed by the clients. For any change in such terms, the clients would be informed.
Provided no consent may be required in case the same is being shared as per compliance guidelines or as required by regulators.
Any information being disclosed to third parties would be in accordance with the Rules and would be done provided such third party has the same level of compliance guidelines as Sharekhan Comtrade Private Limited.
Sharekhan Comtrade Private Limited shall allow clients to review their personal information and the same shall be allowed to be edited provided exchange guidelines relevant to the same are followed.
Sharekhan Comtrade Private Limited shall maintain reasonable security practices and procedures and maintain a comprehensive documented information security programme. In the event of an information security breach, Sharekhan Comtrade Private Limited or a person on its behalf shall be required to demonstrate as and when called upon to do so by the agency mandated under the law, that there have implemented security control measures as per their documented information security programme and information security policies and information security policies that contain managerial, technical, operational and physical security control measures that are commensurate with the information assets being protected with the nature of business.
KYC Languages
Download Client Registration Documents (Rights & Obligations, Risk Disclosure Document, Do's & Don't's) in Vernacular Language :
Note: "This document is a translated version of the client registration documents in English and is being provided in vernacular language to facilitate better understanding by the investors. In case of any ambiguity, the contents of the English version would prevail."
NDNCR Terms & Conditions
By accepting the Terms & Conditions, you authorise Espresso, its representatives and agents to provide information about various products, offers and services provided by Espresso through any mode, including telephone calls, SMSes, emails, letters and any other mode of communication. You also confirm that laws in relation to unsolicited communication referred in "National Do Not Call Registry" as laid down by "Telecom Regulatory Authority of India" will not be applicable for such information/communication.
Filing Complaints on SEBI Complaint Redress System (SCORES) - Easy and Quick
Register on the SCORES portal
Mandatory details for filing complaints on SCORES:
Name
PAN
Address
Mobile Number
Email ID
Benefits:
Effective communication
Speedy redressal of grievances
You can file complaints on SCORES through https://scores.gov.in/scores/Welcome.html
