What Are The Indices In The Stock Market?

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An investor can use a stock market index to measure the performance of a market, like the Bombay Stock Exchange or the National Stock Exchange, or a sector, like the energy, infrastructure, or real estate markets. In India, SENSEX and NIFTY are the two most important stock market indices that are used to measure the market. Indian investors can keep an eye on how the index value changes over time and use it as a benchmark to measure how well their own portfolios are doing. Investors now talk about the stock market as having indices for different parts of the market that don't always move together. Because if they did, there would be no need for different stock market indices. By learning how stock market indexes are made and how they change, you can make sense of the daily changes on the Indian market. SENSEX S&P BSE (also called BSE 30 or SENSEX) SENSEX was the first stock market index for equities. It was created in 1986. It is made up of shares from 30 companies that are listed on the BSE and are well-known and financially stable. These companies are a good example of the major industrial sectors of the Indian economy. How to measure the SENSEX SENSEX has switched to the market capitalization weighted method, which gives weights to companies based on how big they are. The weight goes up as the size goes up. Now, it is thought that the total market share was 100 points when the index was made. This shows the change in terms of % in a way that makes sense. So, if the market capitalization goes up by 10%, the index goes up by 10% as well, from 9 to 10. Let's imagine that there is only one stock on the market. Let's say that the stock is now trading at 200 and that its basic value is 100. If the price of the stock is 260 tomorrow, it has gone up by 30%. So, the index will go from 100 to 130, a 30 point jump. If the stock price goes down from 260 to 208, that's a 20% drop. To reflect the drop, the SENSEX will be changed from 130 to 104. CNX NIFTY S&P (also called NIFTY 50 or NIFTY) The National Stock Exchange has 50 shares of NIFTY, which was started in 1996. It gives investors access to the Indian market through a single portfolio and includes 24 different parts of the Indian economy. NIFTY calculation The same formula that the Bombay Stock Exchange uses to figure out the SENSEX is also used to figure out the NIFTY. But there are three major differences: NIFTY is made up of 50 stocks that are actively traded on the NSE (SENSEX is calculated on 30) On both the SENSEX and the NIFTY, there is a separate index for each sector. This makes it easier for investors to keep track of changes in the market every day. Please think about this helpful advice: if you want to play on the stock market, you need to learn how to keep an eye on the scorecard, which is made up of two stock market indices. Zebu’s platforms give you real-time price moves about all of Nifty and Sensex’s prices. Open a trading account with us to find out more.

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