What is Nifty and Sensex? And Differences

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.