Stock Market is a place where trading in securities issued by the government, public corporations and joint stock companies are done. t is a commonplace for both the buyers and sellers to deal in the financial instruments like shares, debentures, bonds, currency etc. In India, the two most popular stock exchanges are BSE (Bombay Stock Exchange) and NSE (National Stock Exchange). Nifty of NSE and Sensex of BSE are the flagship index of the two most popular stock market in India.
A stock market index, which indicates the entire stock market. Fluctuations in these indices represents the returns obtained by the investors in the market. Nifty comprises of 50 stocks in the index, whereas Sensex has stocks of 30 companies in its index. Take a read of the article presented to you, to get the differences between Nifty and Sensex.
Content: Nifty Vs Sensex
|Basis for Comparison||Nifty||Sensex|
|Stands For||Nifty stands for National fifty.||Sensex stands for Sensitive Index.|
|Meaning||Nifty is an index of top 50 companies traded on the National Stock Exchange (NSE).||Sensex is an index of top 30 companies traded on the Bombay Stock Exchange (BSE).|
|Coverage||50 stocks||30 stocks|
|Situated||NSE (Nifty) is situated in New Delhi.||BSE (Sensex) is situated in Mumbai.|
Definition of Nifty
National Fifty abbreviated as Nifty is a yardstick of the 50 best companies in more than 20 sectors intensely traded by the public on the National Stock Exchange. It is launched by NSE in 1995, located in New Delhi, and is owned by India Index Services and Products (IISL) – a joint venture between CRISIL (Credit Rating and Information Services of India Limited) and NSE.
It is calculated by taking the weighted average market capitalization of 50 companies on the basis of which the weights are assigned to each company. The base year is 1995 for which the index value is 1000. Market Capitalization means the aggregate market value of the company calculated by multiplying the total number of outstanding shares with the current market price per share.
Definition of Sensex
Sensitive Index abbreviated as Sensex is a yardstick of the top 30 companies of over 20 different sectors highly traded by the public on the Bombay Stock Exchange. It is launched by BSE in 1986, located in Mumbai.
The index is calculated on the basis of free float market capitalization, which is calculated by multiplying the weighted average of some shares held by the government and the promoters of the company with the weighted average price. The base year is 1978-79, and the index value is 100. Free float market capitalization refers to the proportion of shares issued by a public company, which are actively traded in the stock market.
Key Differences between Nifty and Sensex
- National fifty is considered as Nifty while the Sensitive Index is considered as Sensex.
- Nifty is related to NSE whereas Sensex is related to BSE.
- Nifty is the indicator of top companies heavily traded on NSE while the Sensex is the indicator of top companies heavily traded on BSE.
- The Sensex is older than Nifty.
- Nifty is situated in New Delhi, while the Sensex is situated in Mumbai.
- The major difference between Nifty and Sensex is that 50 companies are indexed in Nifty while 30 companies are indexed in Sensex.
- Calculated on the basis of weighted average market capitalization.
- Covers major companies in various sectors of Indian economy.
- Both are Indices
- Related to a Stock Exchange.
From the above discussion, the difference between the two is quite clear, and both of them go side by side, as they are related to the popular stock exchanges of the country. BSE is the oldest stock exchange which has more than 4000 listings, whereas Sensex is the indicator which covers 30 stocks based on the financially sound companies over the years. Similarly, Nifty is also an indicator of 50 most well-established companies listed in NSE.