The Indian stock exchange has over 7000 companies listed on it. For a normal trader or investor, it is nearly impossible to keep a track of all of these
companies to understand the market movement. That is why, there are Nifty and Sensex, two market indices made from selected listed companies that represent the entire market. They help us determine the market performance and understand the overall economy.
Let us understand the specifics of these two indices and learn the difference between Nifty and Sensex.
What is Stock Index?
Stock index is the measurement of the overall performance of the stock market. An index picks a sample of listed companies spanning across multiple sectors and industries that act as a representative.
So, when we have to understand the market direction, we look at these market indices. They indicate the market behaviour or investor sentiment. An upward
movement of indices indicates a bullish trend whereas a downward movement indicates a bearish trend. Two Primary Market Indices – Nifty and Sensex
Nifty is the benchmark index of the National Stock Exchange (NSE) and the Sensex is the benchmark index of the Bombay Stock Exchange (BSE). Nifty, also
known as Nifty 50 comprises of the top 50 companies across various sectors and industries that are listed on the NSE. Sensex comprises of the top 30 listed companies on the BSE.
Differences Between Nifty and Sensex
Below mentioned are the key differences between the market indices – Nifty and Sensex:
| Parameters | Nifty |
| Benchmar1<. Index | Nifty is the benchmark index of the National Stock Excha nge (NSE). |
| Full Form | The word Nifty is dertved from the \VOrds – ‘National’ ond ‘Fifty’. |
| Incorporation | Nifty was introduced in the year 1996.It is a relatively newer stockindex. |
| Number of Companies | Nifty comprises of the top 50 listed companies on the NSE. |
| Number of Sectors | Nifty features companies across 24 different industrial sectors. |
| Base Va ue | The base va ue for the calculation of Nifty is 1000. |
| Base Year | The base year for the calculation of Nifty is 1995. |
| Volume and Liquidity | Nifty enjoys a high trade volume and liqu dity in comparison to Sensex. |
| Operated By | Nifty Is operated by ndia Index Services and Products (Subsldlory of Notlonol Stock Exchonge) |
| Website | ww\v.nseindia.com |
Conclusion
Hope the above article clarifies the difference between Nifty and Sensex. For investing in either of the indices, you need to open demat account .