Indian Stock Exchanges
A stock exchange is a place or platform which hosts a market where buyers and sellers come together to trade stocks during specific hours of business days.
Here is the Two of major stock exchanges in India:
1. Bombay Stock Exchange (BSE)
BSE is an Indian stock exchange located at Dalal Street, Mumbai and operates with a vision of to “Emerge as the premier Indian stock exchange with best-in-class global practice in technology, products innovation, and customer service.”
2. National Stock Exchange (NSE)
NSE is the youngest stock exchange of India which came into picture in the year 1992 and operates with a vision, “To continue to be a leader, establish a global presence, and facilitate the financial well-being of people.” Mr. Vikram Limaye is MD & CEO of NSE.
Major Commodity Derivative Exchanges in India
1. Multi Commodity Exchange of India (MCX)
The Multi Commodity Exchange of India Limited (MCX), India’s first listed commodity exchange, is a state-of-the-art, commodity derivatives exchange that facilitates online trading, and clearing and settlement of commodity derivatives transactions, thereby providing a platform for risk management. MCX started its operations in November 2003 and is currently based in Mumbai under the regulatory framework of SEBI. MCX is promoted by Financial Technologies (I) Ltd, SBI, Fidelity International, NSE, NABARD, HDFC Bank, SBI Life Insurance Co., Union Bank of India, Canara Bank, Bank of India, Bank of Baroda and Corporation Bank.
2. National Commodity and Derivatives Exchange (NCDEX)
National Commodity & Derivatives Exchange Limited (NCDEX) is a professionally managed on-line multi commodity exchange. The shareholders of NCDEX comprises of national level institutions, large public sector bank and companies. NCDEX is a public limited company incorporated on 23rd April, 2003 under the Companies Act, 1956. NCDEX is headquartered in Mumbai and offers facilities to its members from its various centres located throughout India.
A stock index, or stock market index, is an index that measures a stock market, or a subset of the stock market, that helps investors compare current price levels with past prices to calculate market performance.
Each stock and bond market index has its own calculation method. In most cases, the relative change of an index is more important than the actual numerical value that represents the index. For example, if the Nifty 50 is at 10,000, this number tells investors that the index is almost ten times its base level of 1,000. However, in order to assess how the index has changed from the previous day, investors need to look at the amount the index has fallen, often expressed as a percentage.
Indices are also often used as a benchmark to measure the performance of mutual funds and exchange traded funds (ETF). For example, many mutual funds compare their returns to those of the Nifty 50's to give investors an idea of how much more or less managers are making money than they would be making an index fund.
What is Sensex?
Full Form of Sensex is “Sensitive Index”. People are happy when the Sensex goes up and upset when it goes down. Sensex is the stock market index of the Bombay Stock Exchange or BSE – it is also called BSE Sensex. It was first published in 1986. The base value of Sensex is 100 and the base year is 1978-79. It is the market weighted stock index of 30 companies that are selected on the basis of financial soundness and performance. Usually, large and well-established companies that are are representatives of the various industrial sectors are chosen.
Calculation: The BSE has some reviews and modifies its composition to be sure it reflects current market conditions. The index is calculated based on a free float capitalisation method, a variation of the market capitalisation method. Instead of using a company's outstanding shares it uses its float, or shares that are readily available for trading. Free Floating capital implies total capitalization less Directors shareholding. As per free float capitalisation methodology, the level of index at any point of time reflects the free float market value of 30 component stocks relative to a base period. The market capitalisation of a company is determined by multiplying the price of its stock by the number of shares issued by corporate actions, replacement of scrips. The index has increased by over twenty five times from June 1990 to the present.
Below is a list of the stock companies included in the Sensex index, as well as a weighting sorted by percentages as of April 1, 2020
|1||RELIANCE||IND. Integrated Oil & Gas||12.28%|
|5||INFYOSYS||IT Consulting & Software||6.96%|
|6||TCS||IT Consulting & Software||5.26%|
|10||L&T||Construction & Engineering||3.40%|
|15||MARUTI||Cars & Utility Vehicles||2.18%|
|17||BAJFINANCE||Finance (including NBFCs)||1.70%|
|19||HCLTECH||IT Consulting & Software||1.48%|
|20||TITAN||Other Apparels & Accessories||1.21%|
|21||ULTRACEMCO||Cement & Cement Products||1.16%|
|24||M&M||Cars & Utility Vehicles||1.05%|
|25||BAJAJ||-AUTO 2/3 Wheelers||0.97%|
|26||TECHM||IT Consulting & Software||0.94%|
|27||ONGC||Exploration & Production||0.92%|
|30||TATASTEEL||Iron & Steel/Interm.Products||0.69%|
What is Nifty?
National Stock Exchange (NSE) is the leading stock exchange of India. Full form of NIFTY is “National Stock Exchange Fifty” – it is the broad index of NSE. NIFTY normally comprises of 50 stocks but right now there are 51 stocks. It is known as NIFTY 50 or CNX Nifty. It is owned and managed by India Index Services and Products Ltd. (IISL). The base period for the Nifty index is November 3, 1995. The base value of the index has been set at 1000, and a base capital of Rs 2.06 trillion.
Calculation: Nifty 50 is computed by free-float capitalization method. It is traded frequently in both options and future market. For trading purpose, the current lot size of Nifty is 75 units.
Below is a list of the stock companies included in the Nifty 50 index, as well as a weighting sorted by percentages as of April 1, 2020
|1||HDFC Bank Ltd.||Banks||10.46%|
|2||Reliance Industries Ltd.||Petroleum Products||10.09%|
|3||Housing Development Fin. Corp. Ltd.£||Finance||7.91%|
|5||ICICI Bank Ltd.||Banks||5.87%|
|6||Tata Consultancy Services Ltd.||Software||5.38%|
|7||Kotak Mahindra Bank Limited||Banks||4.86%|
|8||Hindustan Unilever Ltd.||Consumer Non Durables||4.6%|
|9||ITC Ltd.||Consumer Non Durables||4.2%|
|10||Larsen and Toubro Ltd.||Construction Project||2.8%|
|11||Bharti Airtel Ltd.||Telecom - Services||2.76%|
|12||Axis Bank Ltd.||Banks||2.4%|
|13||State Bank of India||Banks||2.12%|
|14||Asian Paints Limited||Consumer Non Durables||2.1%|
|15||Bajaj Finance Ltd.||Finance||1.64%|
|16||Nestle India Ltd.||Consumer Non Durables||1.63%|
|17||Maruti Suzuki India Limited||Auto||1.6%|
|18||HCL Technologies Ltd.||Software||1.33%|
|20||Power Grid Corporation of India Ltd.||Power||1.14%|
|21||Titan Company Ltd.||Consumer Durables||1.09%|
|22||Sun Pharmaceutical Industries Ltd.||Pharmaceuticals||1.07%|
|23||Dr Reddys Laboratories Ltd.||Pharmaceuticals||1.06%|
|24||UltraTech Cement Limited||Cement||1.05%|
|25||Tech Mahindra Ltd.||Software||0.98%|
|26||Britannia Industries Ltd.||Consumer Non Durables||0.89%|
|27||Coal India Ltd.||Minerals/Mining||0.82%|
|29||Bajaj Finserv Ltd.||Finance||0.78%|
|30||Mahindra & Mahindra Ltd.||Auto||0.76%|
|31||Bajaj Auto Limited||Auto||0.74%|
|32||Bharat Petroleum Corporation Ltd.||Petroleum Products||0.71%|
|33||Oil & Natural Gas Corporation Ltd.||Oil||0.7%|
|34||Shree Cement Ltd.||Cement||0.66%|
|36||Indusind Bank Ltd.||Banks||0.59%|
|37||Hero MotoCorp Ltd.||Auto||0.58%|
|38||Indian Oil Corporation Ltd.||Petroleum Products||0.58%|
|39||Tata Steel Ltd.||Ferrous Metals||0.57%|
|40||Adani Ports & Special Economic Zone||Transportation||0.54%|
|41||Grasim Industries Ltd.||Cement||0.53%|
|42||Eicher Motors Ltd.||Auto||0.51%|
|44||JSW Steel Ltd.||Ferrous Metals||0.42%|
|45||GAIL (India) Ltd.||Gas||0.4%|
|46||Hindalco Industries Ltd.||Non - Ferrous Metals||0.39%|
|47||Bharti Infratel Ltd.||Telecom - Equipment & Accessories||0.38%|
|48||Tata Motors Ltd.||Auto||0.36%|
|49||Vedanta Ltd.||Non - Ferrous Metals||0.33%|
|50||Zee Entertainment Enterprises Ltd.||Media & Entertainment||0.32%|
Difference Between Sensex and Nifty
There is no such difference between Sensex and Nifty because both target large cap stocks. There’s no difference in the performance in 20 years chart. NIFTY and Sensex are stock market indices that indicate the strength of the market. The NIFTY reflects the value of NSE and Sensex is the stock market index for BSE.
Pic:- chart comparison between nifty and sensex
But if you still looking for a difference between Sensex and Nifty – NIFTY is more broad based as it has more listed securities (50 stocks) compared to Sensex (30 Stocks). NIFTY is considered to have a more diversified portfolio than Sensex. More trading happens in NSE as compared to in BSE.