Knowledge Base

What Is Nifty And The Sensex?


in Basics of trading

Both of these are ‘Indices’ (plural of Index), they represent a group of top companies averaged out in a single number. If the Sensex is up, you can say that on average, most stocks are gaining and the true is opposite if the Index falls.
There are two main exchanges in India – The National Stock Exchange (NSE) & The Bombay Stock Exchange (BSE).
The Nifty is an index from the NSE, it has 50 stocks in the index. An easy way to remember this is ‘Nifty Fifty’ – Yes it rhymes.
The Sensex, short for the sensitivity Index is from the BSE and comprises of 30 stocks.

Summary : Nifty is weighted average of 50 top stocks from 24 sectors 

nifty 50

What Is An Index?

An index is simply an average of a group of select stocks, Nifty is a weighted average of 50 stocks, meaning some stocks hold more “value” than other stocks. For example ITC has more weight than Lupin.

Other Indices

The Dow jones is a popular index in USA, The FTSE (pronounced footsie) is a popular index in UK. Similarly In India the most popular Indices are the Nifty and Sensex, however there are many more indices representing other areas of the market. For example there is a midcap Index, an IT index, an Auto Index and even a small cap index.

Why is The Nifty at 7000, how is it calculated?

The nifty started with a base of 1000 in the year 1995, it uses weightage to contribute points to the index. For example ITC is given a higher weightage than most stocks so a movement of 5% in ITC contributes 40 points in Nifty and a 5% move in IDFC contributes 3 points on Nifty (calculation based on June 2014 prices).

What Is the Value of The Top 5 Stocks in Nifty?

The market value of a stock is called the market capitalisation , that is total number of shares multiplied by stock price. Can you make a wild guess?

At the time of writing this the following companies (part of the Nifty Index) have the highest market capitalisation in India.*All prices in Crores as mentioned.

Tata Consultancy     –  4,17,955 crores
Reliance Industries  – 3,49,056 crores
ONGC                              – 3,39,877 crores
ITC                                   – 2,67,638 crores
Coal India                     – 2,35,000 crores

Sixteen Lakh Crores, a large majority of us cannot fathom such unimaginable values, but that is market capitalisation shared by Tata Consultancy, Reliance Industries and ONGC, ITC and Coal India.

 

S.No.     Company Name

01           ACC Limited

02           Ambuja Cements Ltd.

03           Asian Paints Ltd.

04           Axis Bank Ltd.

05           Bajaj Auto Ltd.

06           Bank of Baroda

07           Bharat Heavy Electricals Limited

08           Bharat Petroleum Corporation

09           Bharti Airtel Ltd.

10           Cairn India Ltd.

11           Cipla Ltd.

12           Coal India Ltd.

13           DLF Limited

14           Dr. Reddy’s Laboratories Ltd.

15           GAIL (India) Ltd.

16           Grasim Industries Ltd.

17           HCL Technologies Ltd.

18           HDFC Bank Ltd.

19           Hero MotoCorp Ltd.

20           Hindalco Industries Ltd.

21           Hindustan Unilever Ltd.

22           Housing Development Finance Corporation Ltd.

23           ITC Limited

24           ICICI Bank Ltd.

25           IDFC Ltd.

26           IndusInd Bank Ltd.

27           Infosys Ltd.

28           Tech Mahindra Ltd.

29           Jindal Steel & Power Ltd.

30           Kotak Mahindra Bank Ltd.

31           Larsen & Toubro Ltd.

32           Lupin Limited

33           Mahindra & Mahindra Ltd.

34           Maruti Suzuki India Ltd.

35           NMDC Limited

36           NTPC Limited

37           Oil & Natural Gas Corporation Ltd.

38           PowerGrid Corporation of India Ltd.

39           Punjab National Bank

40           United Spirits

41           Reliance Industries Ltd.

42           Sesa Sterlite Limited

43           State Bank of India

44           Sun Pharmaceutical Industries Ltd.

45           Tata Consultancy Services Ltd.

46           Tata Motors Ltd.

47           Tata Power Co. Ltd.

48           Tata Steel Ltd.

49           UltraTech Cement Ltd.

50           Wipro