Differences Between
Nifty and Sensex
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
|
Sensex
|
|
Benchmark Index
|
Nifty is the benchmark index of the National
Stock Exchange (NSE).
|
Sensex is the benchmark index of the Bombay Stock Exchange
(BSE).
|
|
Full-Form
|
The word Nifty is derived from the words –
‘National’ and ‘Fifty’.
|
The word Sensex is derived from the words –
‘Sensitive’ and ‘Index’.
|
|
Incorporation
|
Nifty was introduced in the year 1996. It is a
relatively newer stock index.
|
Sensex was introduced in the year 1986. And
hence, it is the oldest stock index in India.
|
|
Number of Companies
|
Nifty comprises of the top 50 listed companies on
the NSE.
|
Sensex comprises of the top 30 listed companies on
the BSE.
|
|
Number of Sectors
|
Nifty features companies across 24 different industrial
sectors.
|
Sensex features companies across 13 different industrial
sectors.
|
|
Base Value
|
The base value for the calculation of Nifty is
1000.
|
The base value for the calculation of Sensex is
100.
|
|
Base Year
|
The base year for the calculation of Nifty is
1995.
|
The base year for the calculation of Sensex is
1978-1979.
|
|
Volume and Liquidity
|
Nifty enjoys a high trade volume and
liquidity in comparison to Sensex.
|
Sensex has a low trade volume and liquidity
in comparison to Nifty.
|
|
Operated By
|
Nifty is operated by India Index Services and
Products (Subsidiary of National Stock Exchange)
|
Sensex is operated by BSE (Bombay Stock
Exchange)
|
|
Website
|
www.nseindia.com
|
www.bseindia.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 .
Get started with trading by opening a free demat account with Indira
Securities.