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difference

SUDHIR & PRADEEP JI (CA FINAL+LLB + DISA) (2299 Points)

07 April 2010

can any body tell me the difference between NIFTY & SENSEX. Depely

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3 Replies

Kaushik Vankadkar (Service) (350 Points)
Replied 08 April 2010

Well... First of all I would tell you what is an Index?

The fundamental of any market is there exist different kinds of people having different opinion. For eg: If there is a seller then one has to be a buyer.

Similarly in stock market one expects a particular company to proper whereas the other thinks the reverse. This creates a market where there is a seller and a buyer both holding different perspective mindset.

A falling stock price indicates there are too many sellers and less buyers and vice versa.

Now to determine the overall performance of the stock prices an Index is computed.

Sens*x is an index of BSE. It is an Index consist of 30 companies average prices (calculated in different ways) . The selection of these 30 companies is in such a way that it reflects the overall markets performance. If you see that ,if sens*x is rising then, generally almost major stock prices goes upward and vice versa.

These 30 companies composition keeps on changing.

Similar is with Nifty. It is an index of NSE consist of 50 companies prices.

I hope you understood...

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PRABHAKAR TRIPATHI (REGISTRAR) (32 Points)
Replied 08 April 2010

THANKS KAUSHIK,

FOR THE WONDERFUL EXPLANATION TO HIS FUNDAMENTAL QUESTION

BEST REGARDS

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CA Himanshu Bansal (Risk Manager) (2345 Points)
Replied 09 April 2010

Originally posted by : Kaushik Vankadkar
	Well... First of all I would tell you what is an Index? The fundamental of any market is there exist different kinds of people having different opinion. For eg: If there is a seller then one has to be a buyer. Similarly in stock market one expects a particular company to proper whereas the other thinks the reverse. This creates a market where there is a seller and a buyer both holding different perspective mindset. A falling stock price indicates there are too many sellers and less buyers and vice versa. Now to determine the overall performance of the stock prices an Index is computed. Sensx is an index of BSE. It is an Index consist of 30 companies average prices (calculated in different ways) . The selection of these 30 companies is in such a way that it reflects the overall markets performance. If you see that ,if sensx is rising then, generally almost major stock prices goes upward and vice versa. These 30 companies composition keeps on changing. Similar is with Nifty. It is an index of NSE consist of 50 companies prices. I hope you understood...