Sensex vs Nifty

Podcast Duration: 06:27
Boss, jab hum Bollywood ki baat karte hai to Kapoor aur Bacchan ka mention banta hi hai. Usi tarha Cricket discuss karte samay Virat Kohli ka mention banta hi hai. Aagar aane wale samay mein 2020 ke baare mein discuss karege to us samay coronavirus ka mention rahega hi.

Ussi tarah stock market ke baare mein baat karte samay it is almost impossible to not mention the words sensex and nifty.

Sensex aur Nifty, dono stock market strength indices hai. Stock market ki health ye dono indices indicate karte hai.

Sensex equities ke liye sabse purana stock market index hai. Sensex pe, the stocks of the top 30 companies of the BSE (jo hai Bombay Stock Exchange) listed hain. Ye hai 45 % of the free float market cap (yani ki the stocks held by other shareholders) of the index.

Nifty pe National Stock Exchange (that is NSE) ke top 50 top stocks listed hai. Ye hai 62 % of the free float market cap of the index.

Bada complicated lag raha hai na? Chalo step by step samjha deta hu.

First, ye jaan lete hai index kya hai?

Stock market mein index kisi kitaab ke pehle page jaisa nahi hota hai.

Index instead hota hai a statistical aggregate that measures change yaani ki market performance (simple words mein, it measures price movement).

Index market characteristics ko dhyaan mein rakh ke kisi portfolio of holdings ka value calculate kar lete hai.

Now that you know what an index is, ab dekhte hai index kis cheez ke liye istimal kiya jati hai.

Traders index ko apne holdings ke value ko compare karne ke liye use karte hain.

Traders S&P BSE Sensex aur S&P CNX Nifty Large Cap Indices use kar ke apne portfolios manage karte hai.

Buying aur selling decisions, stock choice decisions etc ye indices ke basis pe banaya jata hai.

To chalo dekh lete hai the key features of Sensex.

Already hume do cheez pata chal gaya. Yaad hai?

Sensex pe 30 stocks listed hai.

Woh stocks Bombay stock exchange ke top 30 stocks hai.

Very good.

Aage badte hain.

Sensex ka base value 100 hain.

It is a market-weighted indicator. Iska ye matlab hai ki Sensex apne 30 listed companies ko stock price aur company ke financial health ke basis chun lete hai.

The market performance of the 30 stocks listed on BSE is directly reflected by the level of the index.

Sensex ka level calculate kaise kiya jata hai?

Sensex reflect kar leta hain the market value of the 30 selected stocks relative to ek base period.

To humne pehle explain kiya tha that market capitalisation or market cap is the amount of stocks held by (or available for trading) on the stock market by the aam aadmi.

Har company ka market cap decide kar ke, USS market cap ko free float factor ke saath multiply kar ke free float market cap mil jata hai. Ise Index Divisor se divide kar ke mil jata hai sensex.

Ab dekh lete hai what is Nifty?

Nifty ke bare mein quick recap:

Nifty National Stock Exchange se linked hai. Nifty is owned and managed by India Index Services and Products Ltd. (IISL). Ye NSE ka subsidiary company hai.

Ye NSE ke top 50 stocks list kar lete hai.

Nifty ke liye thodi aur jankari de deta hu.

Nifty ka nicknames hai Nifty 50 aur CNX Nifty.

Nifty ka base value 1000 hai.

Nifty is a free float market cap weighted method.

Nifty ka level kaise calculate kiya jata hai?

Pahle step mein market value is multiplied by market price. Ye step to Sensex ke hi jaise hai.

Next step mein differences chalu ho jata hai. Equity capital aur Investible Weight Factor ko multiply kar ke free float market capitalization mil jata hai.

Phir is value ko base market capital se divide kiya jata hai aur USS value ko x 1000 multiply kar lete hai. Mil gaya Nifty!

To chalo to conclude let us discuss the key differences between sensex and nifty:

Difference no 1:
Nifty ka name National Fifty se aa jata hai Sensex Sensitive Index se aa jata hai.

Difference no 2:
Nifty is operated by NSE ka subsidiary Sensex is operated by BSE.

Difference no 3:
Nifty ka base value hai 1000 Sensex ka base value 100 hai.

Difference no 4:
Nifty free float market cap weighted method use kar leta hai Sensex market performance weighted indicator hai

Difference no 5:
Mutual funds, brokers and portfolio managers reportedly prefer to track Nifty because NSE had over 6000 stocks listed giving the index a wider scope. Laymen prefer sensex since there fewer - about 1600 - stocks ro track yani ki less complexity.

Difference no 6:
Nifty is ranked the no 10 stock exchange in the world Sensex ka rank 11 hai.

Difference no 7:
1995 se dono ke dono stock indices ne return of 408% diya hai lekin expert forums me suna gaya hai aur expert columns me dekha gaya hai ki risk-adjusted returns mein Nifty ka score thoooooda zyaada hai.

To ye hai dono indices ka simple definition aur beginners ke liye most important and easy-to-follow differences between Nifty aur Sensex. Don't stop here. Keep researching and learning. Angel One website me aapko bahut sare podcasts, blogs aur videos mil jayega jis se you can understand the basics of stock market.