What is the difference between Sensex and Nifty?

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In the stock market, the buyers and sellers trade with the financial instruments like –corporate shares, bonds, and debentures issued by the government and Joint Stock Company currencies. There are all in all two stock agencies in India that are the most popular ones –Sensex of Bombay Stock Exchange (BSE) and Nifty of National Stock Exchange (NSE). Nifty and Sensex are the chief indices of the stock market that represent the entire exchange. In this article, we will share the information on the key differences between Sensex and Nifty.

What is Sensex?

The original interpretation of Sensex is the Sensitive Index for the 30 top most companies trading their shares via the Bombay Stock Exchange that cover around 20 different sectors. The stocks of these companies are highly traded through BSE. The Sensex came into existence in the year 1986 and its headquarter is based in Mumbai. On the basis of free float, the market value of the outstanding shares is calculated that is peddled publicly. The market capitalization calculated with free float indicates the estimated number of shares that can be publicly traded, issued by the company. These shares are multiplied with the average weight of the shares held by the government and the company promoters with the price of the weighted average. From 1978 to 1979 is marked as the base year and the index value is taken as 100.

What is Nifty?

National fifty is abridged as Nifty that encompasses 50 multinational companies that cover almost 20 sectors on the National Stock Exchange. Nifty was inaugurated in the year 1995 by the NSE on which the shares of the companies are traded by the public. The IISL (India Index Services and Products) owns Nifty and its headquarter is situated in New Delhi. The India Index Services and Products is a joint venture of the NSE and Credit Rating and Information Services of India Limited (CRISIL). The calculation of Nifty is done by taking the weighted average of the current market rate of the outstanding shares of 50 companies that are traded publicly. The base year is marked for 1995 to which the index value is 1000.

Differences between Sensex and Nifty:

  1. Nifty is the abbreviation for National Fifty as it encompasses 50 multinational companies whereas Sensex stands for Sensitive Index in which 30 companies trade their shares.
  2. Nifty is established by NSE and the BSE inaugurated Sensex.
  3. The Sensex came into existence way before Nifty.
  4. Headquarter of Sensex is in Mumbai whereas of Nifty is in New Delhi.
  5. The 50 top companies are traded on NSE and 30 top companies are traded under BSE.

Similarities between the Nifty and Sensex:

  1. The outstanding shares of the trading companies are multiplied with the current market price in both Nifty and in Sensex.
  2. Covers 20 major economic sectors of India.
  3. Nifty and Sensex both deal with Indices.
  4. They are both related to the Stock market dealing in Stock Exchange.

In this article, we discussed both the differences and similarities of Nifty and Sensex and concluded that the basic policy is almost similar. We hope the article made the idea about the calculations of Stock on Nifty and Sensex clear. While BSE is the oldest Stock Exchange that lists about 4000 shareholders Nifty indicates the list of shares traded by the 50 most well-established companies.

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