While learning about the stock market is recommended, it might prove impractical for some people as it is time-consuming. It classifies the shares of companies based on industry type, size, financial impact etc.Įquity investing can be a high risk, especially for beginners. Without a benchmark index, differentiating between stocks is easier. One share market has thousands of companies listed, making it intimidating and tedious to discover the right stock to invest in. The following reasons are why the stock market index is necessary for investors: They help investors discover patterns in the market. Stock market indices like Sensex and Nifty depict the condition of the market briefly. It gives a performance summary of stocks in certain industries like healthcare, energy, industrial goods, technology, etc. The BSE 100 aggregates the top 100 biggest companies.Īn index where companies are measured according to the total market value of their outstanding shares. BSE Sensex aggregates the movements of the 30 biggest financially sound Indian companies listed on BSE. They are benchmark indices with bigger groups of stocks. It indicates the whole market and is a comparative measurement displaying the amount earned by the average fund on the market versus the amount it should have earned.
There are a variety of stock market indices in India. Nifty stands for ‘National Stock Exchange Fifty’ and is the index for the National Stock Exchange. Sensex, which stands for ‘Stock Exchange Sensitive Index’, is the stock market index for the Bombay Stock Exchange. A stock market index is created by grouping together similar kinds of stock. A stock market index summarises the movements of the market in real-time. While BSE and NSE are stock markets, both Sensex and Nifty are stock market indices. While BSE is older, NSE is larger with greater daily trades and a higher turnover rate. Founded in 1972, it offers a country-wide stock market similar to BSE. NSE is short for the ‘National Stock Exchange’.
Founded in 1875, BSE is the first and one of the largest securities markets based out of Mumbai in India.
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