What is Sensex and Nifty? Difference Between Sensex and Nifty – Research & Ranking

Before we proceed with the answer to the question ‘What is Sensex and Nifty?’ it is important to understand two important terms associated with it, BSE and NSE.

What is BSE?

Established in 1875 as the Native Share and Stock Brokers’ Association, the Bombay Stock Exchange (BSE) is India’s oldest stock exchange and ranks among the ten largest stock exchanges in the world with the New York Stock Exchange (NYSE), Nasdaq, London Stock Exchange Group, Japan Exchange Group, and Shanghai Stock Exchange among others in the top 10 list.

Based in India’s financial capital Mumbai, the BSE received its official recognition from the government of India under the Securities Contracts Regulation Act on 31^st August 1957.

There are over 5500 companies listed on BSE and is considered to be one of the fastest stock exchanges in the world with a median response time of 6 microseconds.

What is NSE?

Incorporated in 1992, the National Stock Exchange or NSE received its recognition as a stock exchange from SEBI in April 1993 and commenced operations in 1994. NSE is India’s largest stock exchange in India and has over 1700 companies listed on it. Due to its gigantic trading volumes, greater transparency, and efficient employment of automated systems, NSE is considered a premier marketplace for companies preparing to list.

Now that you have understood the difference between BSE and NSE, let’s take a look at

What is Sensex and Nifty?

The BSE SENSEX or BSE Sensitive Index refers to a free-float market-weighted stock market index of the 30 biggest, well-established, and financially sound companies listed on BSE. These 30 stocks which constitute the Sensex are some of the largest and most actively traded stocks and represent the various industrial sectors of the Indian economy.

Published since 1 January 1986, with its base year as 1978–79, the BSE SENSEX is considered as the barometer of the domestic stock markets in India.

The term Sensex was coined by analyst Deepak Mohoni and is derived from a combination of the words Sensitive and Index. In simple words, the BSE Sensex is a benchmark index that collectively showcases the performance of the biggest and well-established companies listed on the exchange.

Constituents of BSE Sensex

NSE Nifty or the National Stock Exchange Fifty (Nifty) refers to the stock market index of 50 most actively traded stocks on the National Stock Exchange (NSE) computed using the free-float market capitalization-weighted method.

Constituents of NSE Nifty

Difference Between Sensex and Nifty

Both BSE Sensex and NSE Nifty are stock market indices, which indicate the strength of the market.

Here are the key differences between Sensex and Nifty:

• While NSE Nifty tracks the 50 most actively traded stocks on the National Stock Exchange (NSE), the BSE Sensex represents 30 of the largest and well-established companies on BSE.
• The base index value of Sensex is 100 whereas the base value index of Nifty is 1000.

Key takeaways

Sensex and Nifty are benchmark indicators that indicate how the stock market is performing. It does not matter whether you invest in the Sensex stocks or Nifty stocks or even other BSE stocks or NSE stocks as long as you invest in fundamentally sound companies.

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Read more:  How Long-term investing helps create life-changing wealth – TOI.