What is Sensex and Nifty-Stock Exchange

What is Sensex? Sensex is one of the most important Market indices in India. Sensex is a short form of Sensitive Index. 
What is Sensex and Nifty-Stock Exchange
What is Sensex and Nifty-Stock Exchange
We hear in News/TV that the Sensex's rating has gone up or down. But what is actually the Sensex? (What is Sensex in Hindi), How is it constituted ?, How is it calculated? Many people do not know so we will discuss this in this article.

What is the Sensex?

People are happy when the Sensex increases, and when it goes down, people become upset. So let's know what the hell is it?

SENSEX is a short form of Sensitive Index, it is also known as BSE-30 because it represents the top 30 companies of Bombay Stock Exchange (BSE). These 30 companies represent different areas and are selected on the basis of various parameters in which market capitalization is given importance. There are currently companies like Bajaj Auto, HDFC Bank, TCS, Reliance Industries etc. in the Sensex.

It was first compiled on January 1, 1986, and it was taken on the basis of "Market-Capitalization Weighted" method. From 1 September 2003, the Sensex is calculated on the free-float market capitalization system, on which most global indices are based, such as Dow Jones, FTSE etc.

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How the Sensex is calculated.

The Sensex is calculated using the free-float Market Capitalization system. In this method, the index shows the free-float market value of 30 constituent shares according to the base period.

What does the free float market capitalization mean?

Free float is for those shares which are open for trading. All shares cannot be free floating. Some may be mortgages, in the hands of individuals or entities controlled by some interests/promoters, some shares may be government holdings, etc. Such locked-in shares are not considered free floating.

What is market capitalization?

The market capitalization is the combined value of all the shares of various companies in the Stock Exchange.

The market capitalization of the company is based on the price of shares of the company and the number of shares issued by the company.
This figure is multiplied by the free float factor to determine the free-float market capitalization system. Every company has to give information on a quarterly basis in the format given by BSE.

Free float market capitalization is divided by the index divisor to get the Sensex value. This separator adjusts for changes in stocks and other corporate functions. The value of the Sensex index is in the Separator base year.
What is Sensex and Nifty-Stock Exchange
What is Sensex and Nifty-Stock Exchange
It is considered as the heartbeat of nearby Securities exchanges of our country. In basic dialect, it very well may be called as 'List' or 'Marker' of execution of organizations recorded at BSE. At the point when Sensex is up, at that point it implies that stock cost of such organizations have gone up or expanded. Then again, when Sensex tumbles down, at that point it implies that stock cost has fallen down or diminished. 

What is Nifty. 

Clever word is produced using N+ fifty. Clever 50 demonstrates fundamental organizations of National Stock Exchange's Fifty. It demonstrates the list figured by the execution of best stocks recorded on National Stock Exchange

The Distinction between Sensex and Nifty. 

Sensex is the file of Bombay Share Market while Nifty is the file of National Stock Exchange. 
BSE is the base of 30 noteworthy and dynamic offers which implies that its development will be chosen by these 30 shares. Regardless of whether the cost of a large portion of the offers of the market tumbles down however the cost of these 30 shares is high, at that point the record will increment. All these 30 shares have diverse weight and file relies on them. These 30 shares are the delegates of various parts. 

A similar case is with Nifty. In any case, the NSE is comprised of 50 noteworthy offers. They are the agents of 24 unique areas. It is utilized for some, reasons like Benchmarking Fund Portfolio; Index based Derivatives and Index Fund

Subsequently, Sensex is the marker of real offers of BSE while Nifty is the indicator of significant offers of NSE. 
Another distinction is that BSE (Sensex) is situated in Mumbai while NSE (Nifty) is situated in New Delhi.
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