#what is sensex?

[hmatrading]

In a stunning turn of events, Prime Minister Narendra Modi's bold prediction has become a reality as the Sensex and Nifty soar to unprecedented heights. Investors are buzzing with excitement and optimism as India's stock market reaches record highs. Let's delve into how this remarkable feat came to be and what it means for the future of the country's economy.

[skytrustunitedstates]

What is the difference between Sensex and Nifty 50? - logicalnivesh

[skytrustit]

What is the difference between Sensex and Nifty 50?

What is the difference between Sensex and Nifty 50?

Sensex and Nifty are indices whose upward, or downward movement determines a bullish or bearish market trend. Out of the two Indian stock exchanges, BSE is the oldest and comprises of top 30 listed companies of different niches. Sensex is the benchmark index of BSE. On the other hand, NSE contains a list of the top 50 companies from different sectors, with Nifty being its benchmark index.

“In the short run, the market is a voting machine. In the long run, it is a weighing machine,” said Benjamin Graham, founder of stock analysis and value investing. The Indian stock market is a massive platform with thousands of stocks listed on it. Traders and investors look out for multiple criteria to find their best bet. However, determining the correct market trend is facilitated by two market barometers – Sensex and Nifty. These two indices’ upward or downward movement determines a bullish or bearish market trend.

What is a stock index?

An index is the subset of the stock market that determines the market’s performance or price movement. An index comprises a list of well-established companies in their respective industries and is regarded as the best performance indicator of the economy.

Furthermore, stocks belong to more than a specific industry like IT, automobile, banks, etc. Instead, they are picked from all the major sectors of the economy, showing a complete picture of the stock market. Apart from investing in companies, you can also invest in stock indexes through mutual funds schemes and exchange-traded funds (ETFs).

There are two Indian stock exchanges – The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). BSE is the oldest stock exchange and comprises of top 30 listed companies of different niches. Sensex is the benchmark index of BSE. On the other hand, NSE contains a list of the top 50 companies from different sectors, with Nifty being its benchmark index. Now let’s have a detailed analysis of what is Nifty and Sensex.

What is Sensex?

Also known as Sensitive Index, Sensex was coined by Deepak Mohoni in 1986. It is the main index of the oldest stock exchange in India, BSE. It comprises shares of 30 top companies of all the major sectors and is calculated using the free float market capitalization method. In simpler terms, when Sensex moves upwards, traders and investors prefer to buy the stocks, and when Sensex moves downward, traders and investors prefer to hold back their positions. The Sensex calculation formula = (Free float market capitalization of 30 companies / Base market capitalization) * Base value of the index

What is Nifty 50?

Also known as the National stock exchange fifty, Nifty is the flagship index of NSE and one of the most recognized stock indexes in India. It was established in 1996, and its other aliases are Nifty 50 and CNX Nifty. Nifty 50 comprises a list of 50 top companies from multiple industries. These companies have a large cap and majorly form three-fourths of Indian capitalization. Nifty is calculated using the free-float market capitalization-weighted method. Index services and products limited (IISL), a subsidiary of NSE, owns and manages Nifty.

People often search for what is bank Nifty when studying Nifty 50. Bank Nifty is a part of Nifty 50 that comprises 12 stocks of only the banking sector. It is also referred to as a sectoral index that measures the performance of only the banking sector.

Difference between Sensex and Nifty 50

The two indexes sound similar to each other in their nature of work and purpose. However, the difference lies in Sensex and Nifty meaning and working style. Below is a detailed list of differences between the two.

Operated by – Sensex is the benchmark index of BSE (Bombay Stock Exchange), the oldest stock exchange in India. Nifty is operated by one of the most recognized Indian stock exchanges, NSE (National Stock Exchange).

Full form – Sensex comprises ‘Sensitive and index,’ and Nifty includes ‘National and fifty.’

Aliases – Sensex is also famous as S&P BSE Sensex. On the other hand, Nifty is also known as Nifty 50 and S&P CNF Fifty.

Establishment – People are often confused about when was Nifty established and when Sensex came into action. Sensex was incorporated in 1986, and Nifty 50 started in 1996.

Number of constituents – Sensex comprises the top 30 companies traded actively in BSE. Whereas, Nifty constitutes the top 50 companies traded actively on NSE.

Number of sectors covered – Sensex covers 13 industrial sectors. Nifty is a broader market index, so it covers 24 industrial sectors.

Base value – The base value of the Sensex index is 100, and the Nifty 50’s base value is 1000.

Base year – The base year considered for Sensex’s calculation is 1978 -1979. Whereas the base year for Nifty50 is 1995.

Volume and liquidity – The volume and liquidity are comparatively lower in Sensex and higher in Nifty 50.

Despite such differences, some well-established and fundamentally stable companies are a part of Nifty50 and Sensex. However, as an investor, one should know that investing only in either will allow you to contribute to the wealth creation process.

Factors responsible for affecting the performance of Sensex and Nifty

As you get well aware of what is Nifty and Sensex, it is essential to know the common factors responsible for affecting the performances of these indexes.

Change in the rate of interest – The stock market and interest rates move in opposite directions. When there is an interest rate increase, lending becomes costlier. Hence, companies reduce their expenses, pressurizing the stock performance, leading to a fall in indices.

Inflation – A rise in inflation is one of the primary reasons for the fall in the stock market. When inflation is high, investors don’t have enough surplus funds to invest, and companies also have to bear the rising economic conditions.

Global Economy – A change in the global economy will lead to a noticeable difference in the performance of indices. For example, a worldwide recession will lead to a performance impact on the Indian indices.

[wonindia]

What is CANSLIM method in Indian stock market?

The CANSLIM method is a popular stock selection strategy developed by William O'Neil, founder of Investor's Business Daily. This method is widely applied in global markets, including India, to identify high-growth stocks with strong potential for long-term gains. CANSLIM is an acronym that represents seven key criteria used to evaluate stocks. Here’s a breakdown of the method as it applies to the Indian stock market:

C - Current Earnings Growth:

Look for companies with a high quarterly earnings growth rate (usually above 25% year-over-year) as a sign of financial strength. In India, strong earnings growth can indicate resilience in a company amid fluctuating economic conditions.

A - Annual Earnings Growth:

Annual earnings should ideally grow by at least 25% over the last three to five years. This long-term growth indicates consistency and helps differentiate solid companies from those with temporary gains.

N - New Product, Service, or Management:

Companies launching innovative products or services, entering new markets, or led by effective management often outperform. In India, sectors like technology, finance, and consumer goods regularly see innovation, making them ideal for CANSLIM.

S - Supply and Demand:

Stocks with lower supply (fewer shares available) and high demand typically have higher potential for price increases. In India, high promoter stakes and low float can create such conditions, particularly in niche companies or emerging sectors.

L - Leader or Laggard:

Choose sector leaders over laggards, as they usually have strong financials, established market share, and brand recognition. Investors in the Indian market may favor blue-chip stocks or leaders within specific sectors.

I - Institutional Sponsorship:

Institutional investment in a company is often a positive sign, reflecting the confidence of large investors. In India, stocks with backing from mutual funds, insurance companies, or foreign institutional investors (FIIs) tend to be more stable.

M - Market Direction:

Invest when the overall market is trending upwards. In India, tracking major indices like the NIFTY 50 or SENSEX can indicate market health. The CANSLIM approach emphasizes that it's better to avoid investments during a bear market phase.

CANSLIM in Practice

The CANSLIM approach is more suited to growth stocks rather than value stocks. Investors in India using this strategy often focus on mid-cap and large-cap stocks with a high growth potential, such as those in sectors like IT, financials, and consumer goods, which have demonstrated strong earnings potential. It requires technical and fundamental analysis, making it ideal for investors willing to stay engaged with market trends.

[ayush27]

HISTORY OF BSE (Bombay Stock Exchange)

The Bombay Stock Exchange (BSE) is the oldest stock exchange in Asia and one of the largest in the world. It was established in 1875 as "The Native Share & Stock Brokers Association" and was later renamed as the Bombay Stock Exchange.

The BSE began as a small group of brokers trading under a banyan tree outside the Town Hall in Mumbai. Over the years, it grew in size and significance, becoming the hub of the Indian stock market. In 1957, the BSE became the first stock exchange in India to be recognized by the government.

The BSE was initially a manual stock exchange, with trades being recorded by hand and communicated via runners and telegrams. In the late 1980s, the BSE shifted to an electronic trading platform, making it one of the first exchanges in the world to do so.

In 1994, the BSE launched the S&P BSE SENSEX, which is a market index that tracks the performance of the 30 largest and most liquid companies listed on the exchange. The SENSEX has since become the benchmark index for the Indian stock market, reflecting the overall performance of the market.

Today, the BSE has over 5,000 listed companies and is the largest stock exchange in India by market capitalization. It is also the first exchange in India to obtain recognition as a stock exchange from the Government of India under the Securities Contracts (Regulation) Act, 1956.

In recent years, the BSE has focused on expanding its global reach and increasing its technology offerings. It has established several international offices and has developed a range of technology-driven products and services to support the growing needs of the market.

Overall, the BSE has played a crucial role in the development of the Indian economy and remains a key player in the global financial landscape.

In the Next Article We know about Why A country Need Stock exchange and what are the role of stock market in indian Economy

Comment if You have any questions

[zebu-helan]

What Are The Indices In The Stock Market?

An investor can use a stock market index to gauge the performance of a market, such as the Bombay Stock Exchange or the National Stock Exchange, or a sector, such as the energy, infrastructure, or real estate sectors. The two most prominent stock market indices in India are the SENSEX and NIFTY. Indian investors can monitor how the index value changes over time and use it as a benchmark to determine how well their own portfolios are performing.

Investors now refer to the stock market as having indexes for various areas of the market that do not necessarily move in lockstep. Because there would be no need for multiple stock market indices if they did. You may make sense of the daily changes on the Indian market by knowing how stock market indexes are created and how they fluctuate.

The SENSEX S&P BSE (commonly known as the BSE 30 or SENSEX) was the first stock market index for stocks. It was founded in 1986. It is composed of shares from 30 well-known and financially stable BSE-listed companies. These businesses are representative of the major industrial sectors of the Indian economy.

How to Calculate SENSEX

The SENSEX has adopted the market capitalization weighted system, which assigns weights to companies depending on their size. The weight increases as the size increases.

It is now believed that the overall market share was 100 points when the index was created. This displays the percentage change in a logical manner. So, if the market capitalization rises by 10%, the index rises by 10% as well, from 9 to 10.

Assume there is only one stock on the market. Assume that the stock is now trading at 200 and that its fundamental value is 100. If the stock is worth 260 tomorrow, it has increased by 30%. As a result, the index will rise 30 points from 100 to 130. If the stock price falls from 260 to 208, the loss is 20%. The SENSEX will be revised from 130 to 104 to reflect the decline.

CNX NIFTY S&P (also known as NIFTY 50 or NIFTY) The National Stock Exchange has 50 shares of NIFTY, which was founded in 1996. It provides investors with access to the Indian market through a single portfolio and encompasses 24 various segments of the market.

NIFTY computation

The same algorithm used by the Bombay Stock Exchange to calculate the SENSEX is also used to calculate the NIFTY. However, there are three significant differences:

The NIFTY index is comprised of 50 equities that are actively traded on the NSE (SENSEX is calculated on 30)

Each sector has its own index on both the SENSEX and the NIFTY. This makes it easy for investors to keep track of market fluctuations on a daily basis.

Consider this useful advice: if you want to play the stock market, you must learn how to keep a watch on the scorecard, which is composed of two stock market indices. Zebu's platforms provide real-time price movements for the Nifty and Sensex. To learn more, open a trading account with us.

[sharemarketinsider]

Weekly Stock Market Recap: SENSEX, NIFTY Stage Strong Comeback Amid Market Volatility

📊 Is the Market on the Mend? After a seven-week slide, SENSEX & NIFTY made a stunning comeback with a Friday rally! 📈 Discover what drove the market rebound, the biggest winners and losers, and what it all means for investors. 👉

[sharebazaar-intensifyresearch]

Stocks market today: Sensex, Nifty 50 crash 1% each; what is driving the market down? Explained with 5 factors

rusted share market advisory firm for confident investing . we offer expert insights, data driven advice, and tailored solutions to help you make informed decisions in the stock market with intensify research, 7 days free trials and 20% discount on all services. visit- intensify research services - Best SEBI registered Research Analyst in India.

[investmenttips4]

Index Funds vs. Actively Managed Funds: Which is Right for You?

Investing in mutual funds offers a variety of options, each catering to different risk appetites and financial objectives. Two popular types of mutual funds are Index Funds and Actively Managed Funds. Understanding their key differences can help you decide which one aligns better with your investment strategy.

What Are Index Funds?

Index funds are passive investment vehicles designed to replicate the performance of a specific market index, such as the Nifty 50 or Sensex in India. Instead of trying to outperform the market, index funds aim to match its performance by holding the same securities as the index.

Advantages of Index Funds

Low Costs: Since they are passively managed, the expense ratio is typically lower compared to actively managed funds.

Diversification: They provide broad market exposure, reducing the risk of being concentrated in a single stock or sector.

Transparency: The holdings of an index fund mirror the underlying index, making it easy to track investments.

Consistent Performance: Index funds often perform in line with the market, offering steady returns over the long term.

Who Should Invest in Index Funds?

Investors who prefer a hands-off approach and are looking for cost-efficient, long-term growth may find index funds a suitable option.

What Are Actively Managed Funds?

Actively managed funds involve a fund manager who make investment decisions to outperform the market. These funds rely on research, analysis, and market timing to generate higher returns.

Advantages of Actively Managed Funds

Potential for Higher Returns: Fund managers actively pick stocks they believe will outperform, aiming to generate alpha (excess returns).

Flexibility: Managers can adjust portfolios to capitalize on market trends or avoid potential downturns.

Targeted Strategies: They can focus on specific sectors, themes, or market conditions to cater to investors' preferences.

Who Should Invest in Actively Managed Funds?

Investors willing to pay higher fees for the chance to earn market-beating returns and those with specific financial objectives may benefit from actively managed funds.

Factors to Consider Before Choosing

Cost Sensitivity: If low fees matter, index funds are ideal.

Risk Appetite: Actively managed funds might suit risk-tolerant investors seeking higher returns.

Time Horizon: Long-term investors may prefer index funds for their stability.

Market Knowledge: If you trust expert managers, actively managed funds could be a better fit.

Conclusion

The choice between index funds and actively managed funds depends on your investment needs, risk tolerance, and preference for cost efficiency or active management. For beginners or those seeking predictable, market-aligned returns, index funds are a great starting point. However, for those with specific objectives and a higher risk appetite, actively managed funds offer an opportunity to potentially outperform the market.

Evaluate your financial objectives and consult with a financial advisor if needed to make an informed decision. Remember, the key to successful investing lies in aligning your portfolio with your needs and staying disciplined over the long term.

[tfatrading]

Silver has long been a valuable asset for investors, collectors, and those looking to hedge against economic uncertainty. As we move further into the post-Diwali period, many are eager to understand how silver prices will behave in the short and long term. The silver rate forecast for today, tomorrow, and the coming weeks holds significant interest for investors in India and across the world.

[skytrustunitedstates]

What is the difference between Sensex and Nifty 50?

Sensex and Nifty are indices whose upward, or downward movement determines a bullish or bearish market trend. Out of the two Indian stock exchanges, BSE is the oldest and comprises of top 30 listed companies of different niches. Sensex is the benchmark index of BSE. On the other hand, NSE contains a list of the top 50 companies from different sectors, with Nifty being its benchmark index.

“In the short run, the market is a voting machine. In the long run, it is a weighing machine,” said Benjamin Graham, founder of stock analysis and value investing. The Indian stock market is a massive platform with thousands of stocks listed on it. Traders and investors look out for multiple criteria to find their best bet. However, determining the correct market trend is facilitated by two market barometers – Sensex and Nifty. These two indices’ upward or downward movement determines a bullish or bearish market trend.

What is a stock index?

An index is the subset of the stock market that determines the market’s performance or price movement. An index comprises a list of well-established companies in their respective industries and is regarded as the best performance indicator of the economy.

Furthermore, stocks belong to more than a specific industry like IT, automobile, banks, etc. Instead, they are picked from all the major sectors of the economy, showing a complete picture of the stock market. Apart from investing in companies, you can also invest in stock indexes through mutual funds schemes and exchange-traded funds (ETFs).

There are two Indian stock exchanges – The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). BSE is the oldest stock exchange and comprises of top 30 listed companies of different niches. Sensex is the benchmark index of BSE. On the other hand, NSE contains a list of the top 50 companies from different sectors, with Nifty being its benchmark index. Now let’s have a detailed analysis of what is Nifty and Sensex.

What is Sensex?

Also known as Sensitive Index, Sensex was coined by Deepak Mohoni in 1986. It is the main index of the oldest stock exchange in India, BSE. It comprises shares of 30 top companies of all the major sectors and is calculated using the free float market capitalization method. In simpler terms, when Sensex moves upwards, traders and investors prefer to buy the stocks, and when Sensex moves downward, traders and investors prefer to hold back their positions. The Sensex calculation formula = (Free float market capitalization of 30 companies / Base market capitalization) * Base value of the index

What is Nifty 50?

Also known as the National stock exchange fifty, Nifty is the flagship index of NSE and one of the most recognized stock indexes in India. It was established in 1996, and its other aliases are Nifty 50 and CNX Nifty. Nifty 50 comprises a list of 50 top companies from multiple industries. These companies have a large cap and majorly form three-fourths of Indian capitalization. Nifty is calculated using the free-float market capitalization-weighted method. Index services and products limited (IISL), a subsidiary of NSE, owns and manages Nifty.

People often search for what is bank Nifty when studying Nifty 50. Bank Nifty is a part of Nifty 50 that comprises 12 stocks of only the banking sector. It is also referred to as a sectoral index that measures the performance of only the banking sector.

Difference between Sensex and Nifty 50

The two indexes sound similar to each other in their nature of work and purpose. However, the difference lies in Sensex and Nifty meaning and working style. Below is a detailed list of differences between the two.

Operated by – Sensex is the benchmark index of BSE (Bombay Stock Exchange), the oldest stock exchange in India. Nifty is operated by one of the most recognized Indian stock exchanges, NSE (National Stock Exchange).

Full form – Sensex comprises ‘Sensitive and index,’ and Nifty includes ‘National and fifty.’

Aliases – Sensex is also famous as S&P BSE Sensex. On the other hand, Nifty is also known as Nifty 50 and S&P CNF Fifty.

Establishment – People are often confused about when was Nifty established and when Sensex came into action. Sensex was incorporated in 1986, and Nifty 50 started in 1996.

Number of constituents – Sensex comprises the top 30 companies traded actively in BSE. Whereas, Nifty constitutes the top 50 companies traded actively on NSE.

Number of sectors covered – Sensex covers 13 industrial sectors. Nifty is a broader market index, so it covers 24 industrial sectors.

Base value – The base value of the Sensex index is 100, and the Nifty 50’s base value is 1000.

Base year – The base year considered for Sensex’s calculation is 1978 -1979. Whereas the base year for Nifty50 is 1995.

Volume and liquidity – The volume and liquidity are comparatively lower in Sensex and higher in Nifty 50.

Despite such differences, some well-established and fundamentally stable companies are a part of Nifty50 and Sensex. However, as an investor, one should know that investing only in either will allow you to contribute to the wealth creation process.

Factors responsible for affecting the performance of Sensex and Nifty

As you get well aware of what is Nifty and Sensex, it is essential to know the common factors responsible for affecting the performances of these indexes.

Change in the rate of interest – The stock market and interest rates move in opposite directions. When there is an interest rate increase, lending becomes costlier. Hence, companies reduce their expenses, pressurizing the stock performance, leading to a fall in indices.

Inflation – A rise in inflation is one of the primary reasons for the fall in the stock market. When inflation is high, investors don’t have enough surplus funds to invest, and companies also have to bear the rising economic conditions.

Global Economy – A change in the global economy will lead to a noticeable difference in the performance of indices. For example, a worldwide recession will lead to a performance impact on the Indian indices.

[vedantbhoomidigital]

Closing Bell: Sensex-Nifty in red for the fourth consecutive day, market halted due to banking stocks; What is the reason for the decline?

Share Market Closing: Even today the Indian stock market is not special for investors. BSE's benchmark index Sensex and NSE's Nifty-50 closed in the red for the fourth consecutive day. The reason behind the slowdown in the stock market is mainly the tension in Western Asian countries, heavy selling of shares by FPIs, (…)

[traderscircuit]

Share Market Today: Insights on BSE Sensex and Best Stocks to Buy

The stock market is a dynamic and ever-changing landscape that presents both opportunities and challenges for investors. Understanding key indices such as the BSE Sensex and staying updated on the share market today can significantly enhance your investment strategy. In this blog, we will explore the BSE Sensex, discuss current market trends, and identify the best stocks to buy today.

What is BSE Sensex?

The BSE Sensex, or the Bombay Stock Exchange Sensitive Index, is a benchmark index that represents the performance of 30 of the largest and most actively traded companies listed on the Bombay Stock Exchange (BSE). It serves as a vital indicator of the overall health of the Indian equity market. The Sensex is calculated using free-float market capitalization, which means it only considers the shares available for trading and excludes locked-in shares.

Importance of BSE Sensex

Market Indicator: The BSE Sensex is often referred to as the heartbeat of the Indian stock market. A rising Sensex generally indicates bullish market sentiment, while a declining index suggests bearish trends.

Investment Benchmark: Many mutual funds and portfolio managers use the BSE Sensex as a benchmark for performance comparison. Investors frequently assess their returns against this index to gauge the effectiveness of their investment strategies.

Economic Barometer: The Sensex reflects the economic conditions in India. Strong performance in the index often correlates with a growing economy and increased investor confidence.

Share Market Today: Current Trends

As of today, the share market has shown signs of volatility, influenced by various factors including economic data releases, global market trends, and geopolitical developments. Keeping a close eye on these factors is crucial for investors seeking to make informed decisions.

Key Factors Affecting the Share Market

Global Market Influences: Trends in international markets, especially in the U.S. and Europe, can impact the Indian stock market. Investors should monitor global indices and economic indicators.

Economic Data Releases: Quarterly earnings reports, GDP growth rates, and inflation data can significantly influence market sentiment and the performance of the BSE Sensex.

Policy Changes: Government policies, interest rate changes by the Reserve Bank of India (RBI), and fiscal measures can create ripples in the share market, impacting investor confidence.

Best Stocks to Buy Today

Identifying the best stocks to buy today requires thorough research and analysis. Here are a few stocks that analysts are currently recommending based on market trends and company performance:

Reliance Industries Limited (RIL): A major player in the energy, petrochemicals, and telecommunications sectors, RIL has shown resilience and growth potential.

HDFC Bank: Known for its strong fundamentals and consistent performance, HDFC Bank remains a favorite among investors looking for stability in the banking sector.

Infosys: As a leading IT services provider, Infosys continues to innovate and expand its offerings, making it a strong contender for long-term growth.

Tata Consultancy Services (TCS): With a robust global presence, TCS is well-positioned to capitalize on digital transformation trends, appealing to growth-oriented investors.

Bajaj Finance: This non-banking financial company (NBFC) has demonstrated impressive growth and profitability, making it an attractive option for those looking to invest in the financial sector.

Conclusion

Understanding the BSE Sensex and keeping track of the share market today is essential for making informed investment decisions. By identifying the best stocks to buy today, you can enhance your portfolio and navigate the complexities of the stock market with confidence. Always consider conducting thorough research or consulting with a financial advisor to tailor your investment strategy to your financial goals.

[sharemarketinsider]

663 pt fall in Sensex, Nifty fall 218 pt- Indian Stock Markets Plunge on Weak Earnings and Foreign Outflows: What’s Next for Investors?