What is Nifty and Sensex? A Complete Guide.
Webblogers Editors Team |
April 5, 2023

The world’s biggest business is the investment of money in the stock market. Where the daily company’s stock fluctuates.

You must have seen the stock market in movies, newspapers, and news channels. Where people come to buy and sell your company’s shares every day.

But there are many people in the world who do not have any knowledge about the stock market. The economic page of the newspaper is easily flipped, so some people change the channel as soon as the news of the stock market comes while watching the news.

By the way, money is useful for everyone, then whenever it comes to the stock market, people do not see that much interest. But some people do not know what the stock market is, but no one remains to understand properly.

How does the stock market work, what is Sensex, what is Nifty, and how is the stock exchange? Knowing the answers to all these questions is not so difficult but it is also easy.

How Nifty and Sensex work in the stock market. You will get the answer below.

What are Indices:-

The ups and downs in the stock market, the ratio of the company’s stock, and those occurring in the stock market. loss – profit. All these things are told through the indices of the stock exchanges.

There are 2 major stock exchange indices in India – National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

More than 1000 companies are listed on any stock exchange. Tracking them all does not happen in any one person or any company. Therefore, these companies are given talks in small groups. They are called indices.

These are called Nifty National Stock Exchange (NSE) and Sensex Bombay Stock Exchange (BSE).

What is Nifty:-

The word “Nifty” is formed by combining these 2 words National and Fifty. This is also known as “Nifty 50”. The full form of Nifty is National Stock Exchange (NSE).

Nifty is the index of the shares of 50 important companies listed on the National Stock Exchange. Nifty monitors the shares of 50 listed companies in the country. It shows the shares of the same company which is listed.


Nifty 50 is the most important stock index in India. Which monitors and gives information about the profit-loss occurring in the shares of the listed 50 companies.

Nifty is the 1st trended indices of India and 2nd (the BSE) means Sensex.

How to make Nifty:-

There are more than 6000 companies on the NSE, out of which Nifty is listed among the largest 50 companies and is estimated among them. These 50 companies are listed only by choosing from different sectors, and the share market of these 50 companies of Nifty. is bought and sold in.

There is an index committee, which has complete information about the stock market and economy and selects 50 companies listed in Nifty.

How Nifty Works:-

The job of Nifty is to keep information about the ratios happening in the market of those listed 50 companies.

From Nifty, we get to know how the listed 50 companies work. If the company does good work, then its direct effect is on the company’s stock. The share rate of the company increases. Due to the increase in the rate of Nifty listed company, the company makes a good profit. And the Nifty also accelerates.

Similarly, if the 50 listed companies of Nifty are not making good profits or the work of the company has stopped, then its direct effect is on the rate of the company’s share, due to which the company loses and the Nifty shares start falling.

What is PE Ratio in Nifty:-

Before buying shares in any company, it is necessary to know some things. PE ratio is the most important factor. Before investing in the stock market, investors, bankers, and foreign clients, while buying or selling shares, know the present condition and PE Ratio of that company. Lie, is a very important factor.

To know the PE ratio, you have to divide the current ratio of any company by its earnings per share of the previous year and the amount that comes to know how much money you have to invest to earn 1 rupee from that company.


For example, if a company has a share of Rs 350 and last year that company earned Rs 20 per share. Now to get the PE Ratio of that company, you have to divide its present share of Rs.350 by the Per Share Earning (ERP) of Rs.20.

(350/20=17.5 rupees)

So if the share value of that company is 17.5 rupees then you will get 1 rupee from that company. To earn 17.5 rupees have to be invested. (For every 17.5 rupees investment you will get Re 1).

What is Sensex:-

Sensex is formed by adding these two words Sensitivity and Index.

Sensex gives information about the profit and loss of shares of a company listed in the Bombay Stock Exchange (BSE) indices.

30 companies listed in the Sensex are included by the BSE, which monitors the rate of those companies in the share market.

It is the largest stock exchange in India, which is the largest in terms of the market capitalization of the company. The indices made to evaluate the company’s share prices, which keep an eye on the movements in the shares of these companies, are called Sensex.

How Sensex is formed:-

There is a total of more than 6000 companies listed on the Bombay Stock Exchange (BSE). Out of which only 30 listed on the Sensex (BSE) are made up of the rate of the company’s shares.

There is a comparison of the Sensex in the market. Then settled 30 listed companies that are important in the market, only those shares are included. The shares of the 30 listed companies are bought and sold more in the market, so the rate of the shares of those 30 companies is included.

The listed 30 companies are selected from 13 different sectors. This company is considered very big in your sector.

These 30 companies are selected from the Stock Exchange Indices Committee, which these companies are selected by the Government, Bankers, and Economic experts.

How Sensex Works:-

The function of Sensex is to give information about the shares of the listed company. Keep an eye on the ups and downs in the shares of these 30 companies.

If the rate of the company’s shares is increasing in the Sensex, then it easily increases in the Sensex. And those companies start getting a profit, similarly if for some reason the shares of the company are not increasing or they do not show any interest in the shares, therefore the Sensex falls (meaning the rate of the company’s share is low, and the shares decrease). Due to this the rate decreases. And the company loses.

Webblogers Editors Team

Webblogers Editors Team


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