Stock Market Index

With over 6,800 stocks and assets listed across stock exchanges in India, it is nearly impossible to track the movement of each asset separately. An index is a collection of top-performing stocks selected from different market sectors that are assumed to be the performance of the market as a whole, selected on criteria such as trading frequency, care size, etc. It is a statistical tool that provides you the ease of gauging the performance of a particular stock against the benchmark index and changes in the market. The stock market index in India is a benchmark indicator of the overall performance of the Indian stock market. The two major stock market indices in India are the BSE Sensex and the NSE Nifty.

The BSE Sensex, also known as the Bombay Stock Exchange Sensitive Index (or simply called Sensex), is the oldest stock market index in India, and it comprises 30 of the largest and most actively traded stocks listed on the Bombay Stock Exchange. The NSE Nifty, also known as the National Stock Exchange Fifty (or NIFTY 50), is a broader index that comprises 50 large-cap stocks listed on the National Stock Exchange of India.

Both the BSE Sensex and the NSE Nifty are market capitalization-weighted indices, which means that the stocks with a higher market capitalization have a greater influence on the index's movement. These indices are widely used as a barometer of the Indian stock market's performance and are closely watched by investors, analysts, and policymakers.

Share market indices can be created based on a variety of selection criteria, such as industry, segment, market capitalization, etc. Each share market index measures the price movement and the performance of the shares that constitute that particular index. This means that the performance of any stock market index is directly proportional to the performance of the underlying stocks that make up the index. In simpler terms, if the prices of the stocks in an index go up, that index, as a whole, also goes up.