Have you ever heard people saying around you that, “Today nifty went down by 20 points, and Sensex went up by 35 points”?
Ever wondered what exactly these people are talking about?
What exactly do these Nifty and Sensex mean?
Okay, Don’t worry. I’m here to help you understand, How exactly Nifty and Sensex works.
Before understanding Nifty and Sensex, We need to understand the Stock exchange, Market Capitalization, NSE, BSE.
Now, What is the stock exchange?
A stock exchange is a place, Where Stockbrokers can trade companies’ stocks and securities. Here, a stock may be bought or sold during a fixed time zone. Simply, it is a place where the stock sellers and buyers meet.
Market Capitalization:
Market Capitalization defines the Company’s shares worth in the stock exchange. Market Capitalization of any organization is calculated by multiplying the number of outstanding shares and each share price. Organizations are generally divided into 3 categories based on their Market Capitalization value.
(i)Large-Cap: The Market Capitalization in these companies falls under the value of $10 billion or more.
(ii)Mid-Cap: The Market Capitalization in these companies falls under the value of $2 billion to $10 billion.
(iii)Small-Cap: The Market Capitalization in these companies falls under the value of $300 million to $2 billion.
NSE (National Stock Exchange):
NSE Stock exchange of India is one of the leading stock exchange companies in India, which was established in 1992. NSE is located in Mumbai City, Maharashtra State. NSE was the first stock exchange in India to provide a modern trading system for Indian Traders. 1952 Companies are listed in the NSE to date. The Market Capitalization value of the Company’s that are listed in NSE is $3.1 trillion, and it has secured 10th Position in World’s Stock Exchange Rankings.
BSE (Bombay Stock Exchange):
BSE Stock exchange of India is one of the oldest stock exchange companies in South Asia, which was established in 1875. BSE is located on Dalal Street in Mumbai City, Maharashtra State. BSE was the first and oldest stock exchange in India to provide a trading system for Indian Traders. 5439 Companies are listed in the BSE to date. The Market Capitalization value of the Company’s that are listed in BSE is $3.6 trillion, and it has secured 9th Position in World’s Stock Exchange Rankings and also the 10th oldest in the world.
I hope that you understood NSE and BSE. I have really a very interesting story to share about BSE, I promise that I will share it in further articles. But for now, Let’s move into the interesting part of the article that is NIFTY50 & SENSEX30.
Nifty50 is an Indian Stock market Index that represents the average of Indian Companies that are listed on NSE based on the Market Capitalization of the companies, they were placed in Nifty50.
Nifty50 includes all 13 sectors of the Indian economy.
The top 50 companies are not always constant in Nifty50. They are frequently replaced based on their Market Capitalization value.
Nifty Next 50:
NiftyNext 50 also know as junior Nifty50. These include the next 50 companies whose Market Capitalization is less than the top 50 companies listed in the Nifty50. NiftyNext 50 companies are potential companies that may include Nifty50 in the future.
I hope that you understood about Nifty50 & NiftyNext 50. Now, Let’s move into another interesting part of the article that is Sensex30.
Sensex30 is a Bombay Stock market Index that represents the average of 30 well-established and financially strong companies that are listed on BSE based on the market capitalization of the companies, they were placed in Sensex30.
NIFTY50 vs SENSEX30:
Actually, we can’t compare between Nifty50 and Sensex30, Because they both are different indices in the Stock Market.
But, I feel that Nifty50 gives a broad view of the analysis of the companies. But whereas Sensex30 gives a higher index value as it comprises 30 well-established and financially strong companies.
I conclude the article here, Hope you like the article. In my further articles, I will promise to write an in-depth analysis about Nifty50 & Sensex30. Feel free to have a discussion with me in the comment section on Nifty50 & Sensex30 and other finance-related topics.
Thank you! Have a nice day :)
