Stock Market basics for beginners >> What is Sensex and Nifty ?
Rishi Kashyap
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What is Sensex and Nifty ?


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Whenever you hear people talking about stock Market in general terms like "stock market crashed today",  "stock market is in the Bull run",  "Bull Market vs Bear Market", what they are actually referring is BSE SENSEX and NSE NIFTY !

What is sensex and Nifty ?
Sensex and Nifty are two different indexes created by the two Indian stock market exchange BSE and NSE. Each stock market has its own way of creating its index, SENSEX (Stock Exchange Sensitive Index) created by BSE consists of 30 stocks in various industries while NIFTY (National Stock Exchange Fifty) created by NSE consists of 50 stocks in various industry.
SENSEX and NIFTY
Since each company in index is considered one of the leaders in its own industry, strangely, index is thus related to economy ! If the company or index is rising people consider this as economy of India rising and vice versa.

Why was Sensex and Nifty created ?
At the time of writing, BSE had more than 4000 and NSE more than 1700 actively traded shares of company. Calculating the progress of each stock daily to know the movement and performance of the stock market will not only be time consuming but impractical.
So each stock exchange decided their own unique way to pick some of listed companies as a representative from its respective industries.

Below table gives Nifty and Sensex index constituents.

NoCompanyISINSENSEXNIFTY
1Asian Paints LtdINE021A01026YESYES
2Axis Bank LtdINE238A01034YESYES
3Bajaj Finance LtdINE296A01024YESYES
4Bajaj Finserv LtdINE918I01018YESYES
5Bharti Airtel LtdINE397D01024YESYES
6Dr Reddy's Laboratories LtdINE089A01023YESYES
7HCL Technologies LtdINE860A01027YESYES
8HDFC Bank LtdINE040A01034YESYES
9Hindustan Unilever LtdINE030A01027YESYES
10Housing Development Finance CorporationINE001A01036YESYES
11ICICI Bank LtdINE090A01021YESYES
12IndusInd Bank LtdINE095A01012YESYES
13Infosys LtdINE009A01021YESYES
14ITC LtdINE154A01025YESYES
15Kotak Mahindra Bank LtdINE237A01028YESYES
16Larsen & Toubro LtdINE018A01030YESYES
17Mahindra & Mahindra LtdINE101A01026YESYES
18Maruti Suzuki India LtdINE585B01010YESYES
19Nestle India LtdINE239A01016YESYES
20NTPC LtdINE733E01010YESYES
21Power Grid Corp of India LtdINE752E01010YESYES
22Reliance Industries LtdINE002A01018YESYES
23State Bank of IndiaINE062A01020YESYES
24Sun Pharmaceutical Industries LtdINE044A01036YESYES
25Tata Consultancy Services LtdINE467B01029YESYES
26Tata Steel LtdINE081A01012YESYES
27Tech Mahindra LtdINE669C01036YESYES
28Titan Co LtdINE280A01028YESYES
29UltraTech Cement LtdINE481G01011YESYES
30Wipro LtdINE075A01022YESYES
31Adani PortsINE742F01042NOYES
32Bajaj AutoINE917I01010NOYES
33Bharat Petroleum Corporation LimitedINE029A01011NOYES
34BritanniaINE216A01030NOYES
35CiplaINE059A01026NOYES
36Coal IndiaINE522F01014NOYES
37Divis LaboratoriesINE361B01024NOYES
38Eicher MotorsINE066A01021NOYES
39GrasimINE047A01021NOYES
40HDFC LifeINE795G01014NOYES
41HERO MotocorpINE158A01026NOYES
42HindalcoINE038A01020NOYES
43Indian Oil CorporationINE242A01010NOYES
44JSW SteelINE019A01038NOYES
45ONGCINE213A01029NOYES
46SBI Life InsuranceINE123W01016NOYES
47Shree CementINE070A01015NOYES
48TATA Consumer ProductsINE192A01025NOYES
49TATA MotorsINE155A01022NOYES
50UPL LIMITEDINE628A01036NOYES
Detailing about the calculation of Index is beyond the scope of this stock market course and mostly futile for general investor. Practically, the rise of Sensex or NIFTY has nothing to do with your actual stock portfolio. Many times the stock market is declining while your portfolio rises and vice versa. A value investor always check the fundamentals of the company and knows how to value the company and is never affected by rise or fall of Sensex or NIFTY.

There are many experts who predict where the index will go in coming years. I can assure you, after 15 years of investing and learning, I think nobody can tell you where the Sensex and NIFTY will be accurately, it is just a wild guess told mostly to create a sense of authority !

Rishi Kashyap | | EDIT