What is the Difference Between Nifty And Sensex?

If you know anything about stock marketing then you already understand that Sensex and Nifty are critical metrics/data that stock marketers make use of every day to decide market trends. But what really is the meaning of Sensex or Nifty? You get to hear about Sensex share price all the time but have you ever pondered about the difference between Sensex and nifty?

Well, if you have no idea then you should relax. This post is going to tell you about the difference between these two so that you have a better understanding of everything. So, keep on reading the post and you would not be disappointed.

The difference

In India, you would find two stock exchanges; the Bombay Stock Exchange and even National Stock Exchange. Each stock exchange requires to have an index to simply measure the overall performance of the market. Sensex is the Index known for Bombay Stock Exchange (BSE), and talking about Nifty , it is the Index for National Stock Exchange (NSE).

Sensex explained

Sensex is clearly Index for the Bombay Stock Exchange. You already know that an index is a sample of listed companies that works as the representative. Over six thousand companies get listed under the Bombay Stock Exchange, and practically it is going to be impossible to evaluate the performance individually.

To solve such type of an issue, BSE makes use of Sensex. Sensex picks up thirty companies that are simply enticing, performing, and even the best for the market. In case these types of companies are performing poorly, then the market trends are down. However, in case only these 30 companies are outdoing, then the market trends get absolutely bullish.

Nifty explained

Nifty is the clear Index used by the National Stock Exchange (NSE) and it is made by the blend of National and Fifty (Nifty). Contrary to Sensex, Nifty gathers the sample of fifty performing and enticing stocks to determine the market trends.

Somewhat similar to Sensex, Nifty chooses the stocks from diverse types of sectors. Some of these encompass the stocks from the sectors like IT, financial services, Consumer Goods, automobiles, telecommunication, and more. Apart from this , stocks picked under Nifty are the ones that outdo others.

Sensex and Nifty

Both Nifty and Sensex are absolutely the Index that helps the stock marketers determine the overall performance trend of the entire stock market. The only main difference is Sensex comprises 30 companies, and that of Nifty comprises 50 companies. Because of the high number of active stock marketers, high liquidity, and even active buying and selling, Nifty is much more important in number than Sensex, but in general , Sensex has been somewhat performing better than Nifty.

Also, you should know that Sensex is older than that of Nifty and has been outdoing Nifty though the number of companies in Nifty is quite more. Whether nifty midcap, or any other stock; the choices are yours to make when you are investing or trading. Just make sure that you pick the stocks that take you higher and keep you performing well.

Conclusion

To sum up, since you have the basic understanding of Sensex and nifty; make sure that you are doing your investments and trading right.  You can use 5paisa  for all your stock marketing endeavours!

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