What is Nifty and Sensex
Nifty and Sensex: Hello friends welcome to my blog today in this blog we are going to discuss in details about Nifty and Sensex. Also in this post we are going to know the difference between Nifty and the Sensex. From this post I would like to share all the necessary information’s related to Nifty and Sensex and I will try to discuss everything in point so that you can easily understand anything and do not have any confusion after reading the post.
Nifty
It stands for National stock exchange fifty and I would also like to tell you that it is considered as the equity benchmark index for the National stock exchange.
Also the main point of nifty includes that it has the stock from the top 50 of the 1600 companies which are actively trading in the National stock exchange across all the 24 sectors. Also with the help of the Nifty 50 you will see that almost 50 stock accounts for about 65% of the total free market capitalization float in the index.
Sensex
It is active in the Bombay stock exchange (BSE) and it is also known as the market index of the BSE. It is also known by the name of S&P BSE Sensex.
Also I would like to tell you from this post that Sensex is very older than the Nifty 50 because it is running from the time when there was no internet and you have to go to the Bombay stock exchange to do trading offline. It was introduced in the year 1986 by the Bombay stock exchange when BSE followed that it has a weight market capitalization method. It has an base value for calculating Sensex is 100.
Some of the differences between the sensex and the Nifty
Both of these are one of the most important indices in the Indian stock market. Always most of the indices and stocks try to compare their benchmark indices and also the performance with it.
I would also like to tell you that with the differences between the Sensex and the Nifty it also has much similarities that all the investors must learn before investing in stock market and they can also learn the similarities and difference between them through any YouTube videos or websites.
How can we calculate Nifty?
It is always calculated with the help of nifty calculation and it always takes place with the free float Market capitalization weighted methodology. It always try to represent the market value of the constituents in relation to its base period which is 3rd November 1995.
If any people want to calculate the Nifty index the first you have to calculate the market capitalization by easily multiplying the number of shares with their prices and they can easily calculate the Nifty through it.
Now you have to calculate the free float market capitalization for this you have to multiply the investable weight factor( iwf) and the original market capitalization. And also iwf represents the number of share that investor can proportionate and can freely trade in the stock market. Also the iwf represent that the percentage of share that are not held by any of the directors or any of the promoters of the company.
And that the end you have to calculate the index value just by dividing the current market value to the base market value and then easily multiplied to the base index value which is 1000.
Also I would like to tell you that the base market capital of nifty is around 2.06 trillion.
How can we calculate Sensex?
It is also a method which is almost similar to the Nifty. It is also usually calculated with the help of the free float market capitalization method. Also like the Nifty this index also help in calculation of a total market value of the constituent in relation to its base period which is the year 1978 to 1979.
If you want to calculate the Sensex then you are required to calculate the market capitalization of each and every company which applies the same formula always. Now you have to calculate the free float Market capitalization by multiplying the market capitalization with the free float factor.
Now to calculate the index value you must divide free float Market capitalization with the index divisor.
Now if you don’t have much knowledge about index divider than I would like to tell you that it usually establish the relationship between the base period and the current period. Also it helps in facilitating the comparison across different periods.
You can also earn money by investing in nifty and Sensex very easily. Just you have to get a much knowledge of stock market so that you can also easily and money through it.
Now we are going to share some basic differences between them
Nifty is usually a new stock index which was introduced in the year 1996. Also the term Sensex has came from the combination of two words sensitive and index. Nifty has also come from the combination of two words such as national and fifty and these includes top 30 BSE listed firms in it.
How does Nifty and sensex works
Nifty usually made up of 50 stocks with the help of the best 50 firms which are used to calculate the index very easily but in the case of the Sensex it is just opposite it is made up of 30 stocks from the top 30 companies which are usually able to calculate the index very easily. Also the major differences is that Nifty has a base index value of thousand but in the case of Sensex it has a base index value of only hundred.
Which is better sensex or Nifty?
Both of this help in assisting the traders in the stock market by determining the overall performance of the stock market in the recent times. The only major difference between them is that Sensex includes 30 companies and the Nifty contains 50 companies.
Also I would like to tell you that Nifty is more significant in number because it has huge number of active stock markets in it and it also has a strong liquidity and also you can buy and sell it very aggressively but also the Sensex is also perform better overall.