Nifty 50 and Sensex: A Comprehensive Guide to India’s Stock Market Benchmarks
The Nifty 50 and Sensex are the two most prominent stock market indices in India, serving as key indicators of the country’s economic health and investor sentiment. They represent the performance of top companies listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). This article explores their significance, composition, calculation methods, and their role in shaping investment decisions. What is the Sensex? The Sensex , short for the Sensitive Index, is India’s oldest stock market index, introduced by the BSE (Bombay Stock Exchange) in 1986. It comprises 30 well-established and financially sound companies across various sectors, representing about 45% of BSE’s total market capitalization. Key Features of Sensex: Selection Criteria: Companies are chosen based on market capitalization, liquidity, and sector representation. Free-Float Market Capitalization Weighted: Only publicly traded shares (excluding promoter holdings) are considered. Sectoral Diversit...