Difference between Sensex and Nifty

¤ The Sensex is an "index". An index is basically an indicator. It gives you a general idea about whether most of the stocks have gone up or most of the stocks have gone down. The Sensex is an indicator of all the major companies of the BSE. The Nifty is an indicator of all the major companies of the NSE. ¤ If the Sensex goes up, it means that the prices of the stocks of most of the major companies on the BSE have gone up. If the Sensex goes down, this tells you that the stock price of most of the major stocks on the BSE have gone down. Just like the Sensex represents the top stocks of the BSE, the Nifty represents the top stocks of the NSE. ¤ BSE is the Bombay Stock Exchange and the NSE is the National Stock Exchange. The BSE is situated at Bombay and the NSE is situated at Delhi. These are the major stock exchanges in the country. There are other stock exchanges like the Calcutta Stock Exchange etc. but they are not as popular as the BSE and the NSE. Most of the stock trading in the country is done though the BSE & the NSE. ¤ Besides Sensex and the Nifty there are many other indexes. There is an index that gives you an idea about whether the mid-cap stocks go up and down. This is called the “BSE Mid-cap Index”. There are many other types of indexes. There is an index for the metal stocks. There is an index for the FMCG stocks. There is an index for the automobile stocks etc. ¤ The Bombay Stock Exchange is considered to be the oldest stock exchange in India, as well as in Asia. While the BSE was founded in 1875, it was in 1992 that the NSE came into existence. It was only after the launch of Sensex, in 1986, that Nifty came into existence. ¤ Nifty is more broad-based than Sensex, as the former consists of more listed companies. Nifty is a combination of ‘N’, meaning national, and ‘ifty’, meaning fifty. On the other hand, Sensex refers to the sensitivity index of the BSE. ¤ Nifty comprises of about 50 scripts from various sectors. On the other hand, Sensex of the BSE comprises of 30 scripts from various sectors. ¤ Sensex has gone up - What does that mean? Sensex has gone up by 100 points and Nifty has gone up by 50 points. This basically means on an average the 30 shares in BSE and 50 Shares in NSE have performed well. Individual stock prices should have increased and decreased. But majority of the stock prices in the list of 30 for BSE and 50 for NSE have increased.