Question

Explain nifty and sensex.

Answer 1

Nifty:

1. The word Nifty originates from 2 words, “National” and “fifty”.
2. Nifty basically means the index of the 50 most actively traded stocks from across all sectors.
3. Nifty represents the top stocks of the NSE and when we talk about nifty going up, it means that all the heavyweight stock of NSE across all sectors are moving up.
4. Nifty is computed from the performance of top stocks from different sectors.
5. Nifty is calculated by using the market capitalization-weighted method according to which weights assigned according to the size of the company.
6. Larger the size, the larger the weightage.

Sensex:

1. Sensex is an index of the stocks in BSE.
2. Sensex has a list of 30 stocks.
3. BSE decides the stocks that are to be listed in Sensex.
4. The criteria for picking a stock to be listed on Sensex are the volume of the trade of that stock and the total volume of the stock in BSE.
5. BSE regularly prepares a set of 30 stocks which will be together called Sensex.
6. BTW Sensex means sensitive index now each stock is allotted a weightage according to criteria.
7. BSE each day stocks are traded and the price of stocks is determined according to demand and supply.