What is Sensex and Nifty? Difference Between Sensex and Nifty

26 Mar 2021by Pradeep U

What is Sensex and Nifty? Difference Between Sensex and Nifty

Before we proceed with the answer to the question ‘What is Sensex and Nifty?’ it is important to understand two important terms associated with it, BSE and NSE.

What is BSE?

Established in 1875 as the Native Share and Stock Brokers' Association, the Bombay Stock Exchange (BSE) is India’s oldest stock exchange and ranks among the ten largest stock exchanges in the world with the New York Stock Exchange (NYSE), Nasdaq, London Stock Exchange Group, Japan Exchange Group, and Shanghai Stock Exchange among others in the top 10 list.

Based in India’s financial capital Mumbai, the BSE received its official recognition from the government of India under the Securities Contracts Regulation Act on 31st August 1957.

There are over 5500 companies listed on BSE and is considered to be one of the fastest stock exchanges in the world with a median response time of 6 microseconds.

What is NSE?

Incorporated in 1992, the National Stock Exchange or NSE received its recognition as a stock exchange from SEBI in April 1993 and commenced operations in 1994. NSE is India’s largest stock exchange in India and has over 1700 companies listed on it. Due to its gigantic trading volumes, greater transparency, and efficient employment of automated systems, NSE is considered a premier marketplace for companies preparing to list.

Now that you have understood the difference between BSE and NSE, let’s take a look at

What is Sensex and Nifty?

The BSE SENSEX or BSE Sensitive Index refers to a free-float market-weighted stock market index of the 30 biggest, well-established, and financially sound companies listed on BSE. These 30 stocks which constitute the Sensex are some of the largest and most actively traded stocks and represent the various industrial sectors of the Indian economy.

Published since 1 January 1986, with its base year as 1978–79, the BSE SENSEX is considered as the barometer of the domestic stock markets in India.

The term Sensex was coined by analyst Deepak Mohoni and is derived from a combination of the words Sensitive and Index. In simple words, the BSE Sensex is a benchmark index that collectively showcases the performance of the biggest and well-established companies listed on the exchange.

Constituents of BSE Sensex

Constituent

Industry

Asian Paints Ltd

Paints

Axis Bank Ltd

Financial services

Bajaj Auto Ltd

Automobile

Bajaj Finance Ltd

Financial services

Bajaj Finserv Ltd

Financial services

Bharti Airtel Ltd

Telecom

Dr. Reddy's Laboratories Ltd

Pharma

HCL Technologies Ltd

Information technology

HDFC Bank Ltd

Financial services

Hindustan Unilever Ltd

Consumer goods

Housing Development Finance Corp

Financial services

ICICI Bank Ltd

Financial services

IndusInd Bank Ltd

Financial services

Infosys Ltd

Information technology

ITC Ltd

Consumer goods

Kotak Mahindra Bank Ltd

Financial services

Larsen & Toubro Ltd

Construction

Mahindra & Mahindra Ltd

Automobile

Maruti Suzuki India Ltd

Automobile

Nestle India Ltd

Consumer goods

NTPC Ltd

Power

Oil & Natural Gas Corp Ltd

Oil & gas

Power Grid Corp of India Ltd

Power

Reliance Industries Ltd

Oil & gas

State Bank of India

Banking

Sun Pharmaceutical Industries Ltd

Pharma

Tata Consultancy Services Ltd

Information technology

Tech Mahindra Ltd

Information technology

Titan Co Ltd

Consumer goods

UltraTech Cement Ltd

Cement & cement products

 

NSE Nifty or the National Stock Exchange Fifty (Nifty) refers to the stock market index of 50 most actively traded stocks on the National Stock Exchange (NSE) computed using the free-float market capitalization-weighted method.

Constituents of NSE Nifty

Company Name

Industry

Adani Ports and Special Economic Zone Ltd.

Services

Asian Paints Ltd.

Paints

Axis Bank Ltd.

Financial services

Bajaj Auto Ltd.

Automobile

Bajaj Finance Ltd.

Financial services

Bajaj Finserv Ltd.

Financial services

Bharat Petroleum Corporation Ltd.

Oil & gas

Bharti Airtel Ltd.

Telecom

Britannia Industries Ltd.

Consumer goods

Cipla Ltd.

Pharma

Coal India Ltd.

Metals

Divi's Laboratories Ltd.

Pharma

Dr. Reddy's Laboratories Ltd.

Pharma

Eicher Motors Ltd.

Automobile

GAIL (India) Ltd.

Oil & gas

Grasim Industries Ltd.

Cement & cement products

HCL Technologies Ltd.

Information technology

HDFC Bank Ltd.

Financial services

HDFC Life Insurance Company Ltd.

Financial services

Hero MotoCorp Ltd.

Automobile

Hindalco Industries Ltd.

Metals

Hindustan Unilever Ltd.

Consumer goods

Housing Development Finance Corporation Ltd.

Financial services

ICICI Bank Ltd.

Financial services

ITC Ltd.

Consumer goods

Indian Oil Corporation Ltd.

Oil & gas

IndusInd Bank Ltd.

Financial services

Infosys Ltd.

Information technology

JSW Steel Ltd.

Metals

Kotak Mahindra Bank Ltd.

Financial services

Larsen & Toubro Ltd.

Construction

Mahindra & Mahindra Ltd.

Automobile

Maruti Suzuki India Ltd.

Automobile

NTPC Ltd.

Power

Nestle India Ltd.

Consumer goods

Oil & Natural Gas Corporation Ltd.

Oil & gas

Power Grid Corporation of India Ltd.

Power

Reliance Industries Ltd.

Oil & gas

SBI Life Insurance Company Ltd.

Financial services

Shree Cement Ltd.

Cement & cement products

State Bank of India

Financial services

Sun Pharmaceutical Industries Ltd.

Pharma

Tata Consultancy Services Ltd.

Information technology

Tata Motors Ltd.

Automobile

Tata Steel Ltd.

Metals

Tech Mahindra Ltd.

Information technology

Titan Company Ltd.

Consumer goods

UPL Ltd.

Fertilisers & pesticides

UltraTech Cement Ltd.

Cement & cement products

Wipro Ltd.

Information technology

 

Difference Between Sensex and Nifty

Both BSE Sensex and NSE Nifty are stock market indices, which indicate the strength of the market.

Here are the key differences between Sensex and Nifty:

  • While NSE Nifty tracks the 50 most actively traded stocks on the National Stock Exchange (NSE), the BSE Sensex represents 30 of the largest and well-established companies on BSE.
  • The base index value of Sensex is 100 whereas the base value index of Nifty is 1000.

Key takeaways

Sensex and Nifty are benchmark indicators that indicate how the stock market is performing. It does not matter whether you invest in the Sensex stocks or Nifty stocks or even other BSE stocks or NSE stocks as long as you invest in fundamentally sound companies.

Click here to invest in a portfolio of 20-25 fundamentally sound companies with the potential to multiply your wealth by 4-5 times in 5-6 years.

 

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