INDIAN INDEX: SENSEX AND NIFTY How to get profit from it .


INDIAN INDEX: SENSEX AND NIFTY How to get profit from it .
INDIAN INDEX: SENSEX AND NIFTY How to get profit from it . 

Table of Contents

* Sensex
*Nifty
*Importance of indices
  • Most of the business in Indian stock market is on two stock exchanges: Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).                                                                                                                                                                                                                            BSE has existed since 1875 and on the other hand, NSE was established in 1992 and it started trading in 1994.                                                                                                                     However,      
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  • both exchanges follow the same trading mechanism, trading hours, settlement process, etc. BSE has more than 5,000 listed companies, while the rival NSE is about 1,600. Of all the listed firms on BSE, the market capitalisation of nearly 500 companies is more than 90%; Most of the shares in the rest of the multitude are not liquid and they do not have much trading.
Almost all important firms of India have been listed on both exchanges. NSE is almost monopoly in derivative trading with almost 70% market share in spot trade, up to 2009, and with about 98% stake.

Trading flows leads to lower costs, market efficiency and innovation on these exchanges.
Two major indices of the Indian market are Sensex and Nifty .

The Sensex is the oldest market index for equity; It includes stocks of 30 firms listed on BSE, which represent about 45% of the total free-float market capitalisation of the index. It was created in 1986 and provides time series data from April 1979.

Another index is Standard & Poor's CNX Nifty. It includes 50 shares listed on the NSE, which represent about 62% of its free-float market capitalisation. It was created in 1996 and is based on Time Series data from July 1990.

SENSEX

Sensex word was made by stock market analyst Deepak Mohoni. It is a combination of synthetic and index words.

 Sensex is a value-based index and it is calculated based on the flow capitalisation process. In this, only the shares of the company are used which is fully available for business.

 In this release process, the share of promoter, government and institutional investors is not included. This process was implemented on September 1, 2003 to present the correct picture of the attitude of the market.

These companies represent different industrial areas of the Indian economy in a way. These companies are called "blue-chip" companies.
Sensex
Using the information from April 1979, the long-term rate of withdrawal of S & P BSE Sensex is 18.6% per annum.

In 1986 it was close to 560 and today it has a close bond of 39,000 i.e., if the Sensex has been invested in the companies, then it returns about 70 times in 33 years.

NIFTY

Nifty is the index of the 50 major stocks listed on the National Stock Exchange.

Nifty is made up of two words; National and Fifty | The nifty word is based on the top five stocks listed on the National Stock Exchange.

 The base of the Nifty is taken as the year 1995 and the original value is set to 1000. Just like the Sensex, these 50 companies are selected on the basis of free float market capitalisation.
In 1999 it was close to 890 i.e. that it fell below the 1000, but today it has a close bond of 11,700, that is, if the Nifty is invested in companies, then it returns about 13 times in 20 years.

IMPORTANCE OF INDICES

It is said that the stock market plays a major role in keeping the country's economic health and maintaining its progress.

It started in the USA with the construction of Dow Jones in 1884. There are many stock market indices in the world now.

 Notable among these are: S & P Global, Dow Jones, FTSE, Hongsheng and Nikkei. In spite of their highly popularity among investors, there has been a lot of criticism on many occasions. False scams, corporate corruption, artificially high value of shares, showcasing duties in research firms and conflict of interest etc.

Many examples are found. This creates instability in the market, the image of the indexes is poor, because then it is no longer a sign of the listed health of the listed company.


Despite this, the stock market and their indices remain very important. Stock markets provide the liquidity needed to the economy. India's two major markets, the BSE Sensex and the Nifty have contributed a lot to the Indian capital market to get the best place on the world map.

The increasing presence of foreign institutional investors plays an important role in connecting our markets to the global market.



The point of view is that it is generally considered difficult to return / profit more than the indices. Indices have multiplied in many years, but very few of the "active" investors who invested on their own have made a lot of returns.

While some mutual funds have been able to beat these indices, there are too many that they are unable to do.

Therefore, it is also possible for readers to make direct investments through "Index Fund" in these indices, the cost is very low as no other arrangement is needed in comparison to other mutual fund schemes.


But it also means that by investing in it, it is also impossible to earn returns from the indices.


thanks for the time .

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