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What is Sensex and nifty
in previous learn about stock market every time hear about stock market you happen to hear about Sensex and nifty
In short nifty and Sensex are index
.What is an index?
Index means an indicator,
.Need for index in a stock market?
The performance of a stock market is judged and knowing about it is important, for knowing the details of stock market in your area, if it is increasing or decreasing, aware of such information is important and it is liked to the economy of such country, in order to know about the growth of economy stock market is useful
Stock market indicates the performance of the stock market which in turn indicates the [performance of the economy
if you could judge the growth a company in stock market just by looking at a number then it is called index of a stock market ,that is the function of the index in the stock market
How is index calculated ?
Free float capitalization is a formula for calculating index, this formula is used to calculate the index number
What is Sensex and nifty?
Sensex is the index of BSE [Bombay stock exchange ] and nifty is index of NSE as you know we already told about BSE, NSE in previous blog
How Sensex is calculated ?
Sensex is calculated on the basis of valuating top 30 companies of BSC
How Nifty is calculated ?
Nifty is calculated on the basis of vaulting top 50 companies of NSC
Application of stock market index?
1. To evaluate the performance of stock market and get ideas about the economy
2. For bench marking
Bench marking it is a type of application that an investor can value his returns
For example if he got a return of 15% from the stock market but the market has grown 30% that means his returns or growth was poor, and he could know that the market had out performed him, at the same time he got returns more than any where he could get
Sectoral Index
There are many companies in NSC, for a person if he wants to check the growth of automobiles you cannot check Nifty 50, there comes the automobiles nifty in order to check index of automobiles, which means we can check the growth of a particular sector in stock market
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