Nifty vs Sensex
The Nifty 50 and the Sensex are India's two most-watched stock market indices. When people say 'the market went up today', they usually mean one of these.
What is Nifty 50?
The Nifty 50 is the benchmark index of the National Stock Exchange (NSE). It tracks 50 large, actively traded companies across major sectors of the Indian economy.
What is Sensex?
The Sensex (Sensitive Index) is the benchmark index of the Bombay Stock Exchange (BSE). It tracks 30 large, well-established companies listed on the BSE.
Nifty vs Sensex: key differences
| Nifty 50 | Sensex | |
|---|---|---|
| Exchange | National Stock Exchange (NSE) | Bombay Stock Exchange (BSE) |
| Number of companies | 50 | 30 |
| Full name | Nifty 50 ('National' + 'Fifty') | Sensex ('Sensitive Index') |
| Calculation method | Free-float market capitalisation | Free-float market capitalisation |
| Breadth | Wider coverage of sectors | Narrower, focused on the largest companies |
How the indices are calculated
Both use free-float market capitalisation: only shares available for public trading are counted, not those held by promoters or the government. Bigger companies therefore move the index more than smaller ones.
Why Nifty and Sensex matter
- A quick read on the overall direction of the Indian market
- Benchmarks to judge how your portfolio or fund is doing
- The basis for index funds, ETFs and derivatives
Why they usually move together
Many of the largest companies are in both indices, so the Nifty and Sensex generally rise and fall together on most days.
How to invest in Nifty or Sensex
- Index funds that track the Nifty 50 or Sensex, often through a monthly SIP
- ETFs that trade on the exchange like a share
- Index futures and options, which are complex and suited only to experienced traders
Frequently asked questions
What is the difference between Nifty and Sensex?
The Nifty 50 tracks 50 large companies on the NSE, while the Sensex tracks 30 large companies on the BSE. Both use free-float market capitalisation.
Which is better, Nifty or Sensex?
Neither is better; they measure the market slightly differently. The Nifty 50 covers more companies and sectors, so many investors use it as the broader benchmark.
Can I buy Nifty or Sensex directly?
You can't buy an index itself, but you can invest in index funds or ETFs that hold the same companies in the same proportions.
Why does the Sensex have a much higher value than the Nifty?
The two indices started from different base values and dates, so their point levels are not comparable. What matters is the percentage change, not the number of points.
Educational information only, not investment advice. Market data may be delayed.
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