What is Nifty and Sensex?
Nifty and Sensex are both important stock market indices in India, but they
track different things:
Nifty:
- Stands for National Stock Exchange Fifty.
- The benchmark index of the National Stock Exchange (NSE).
-
Tracks the performance of the 50 largest and most liquid companies listed on
the NSE.
-
Represents approximately 70% – 75% of the total market capitalization of the
Indian stock market.
- Considered a more broad-based index due to its wider range of sectors.
- Often seen as a more volatile index compared to the Sensex.
Sensex:
- Stands for Stock Exchange Sensitive Index.
- The benchmark index of the Bombay Stock Exchange (BSE).
-
Tracks the performance of the 30 largest and most liquid companies listed on
the BSE.
-
Represents approximately 45% – 50% of the total market capitalization of the
Indian stock market.
-
Considered a more traditional index due to its longer history and focus on
established companies.
- Often seen as a more stable index compared to the Nifty.
Differences between Nifty and Sensex
Here’s a table summarizing the key differences between Nifty and Sensex:
| Feature | Nifty | Sensex |
| Exchange | National Stock Exchange (NSE) | Bombay Stock Exchange (BSE) |
| Number of companies | 50 | 30 |
| Market capitalization coverage | 70% – 75% | 45% – 50% |
| Sector coverage | More broad-based | More traditional |
| Volatility | More volatile | More stable |
Ultimately, the choice of which index to follow depends on your individual
investment goals and risk tolerance. If you’re looking for a wider
representation of the Indian market, the Nifty might be a better choice. If
you prefer a more established and stable index, the Sensex might be a better
fit.
