What is Nifty and Sensex? Basics of Stock Market Index!

This article is intended for those who have just started investing in stocks, and is intended for people who have little or no knowledge about Nifty Index and Sensex.

Dalal Street in Mumbai, India, is home to the Bombay Stock Exchange, India’s largest stock exchange, and several related companies and financial institutions. When the Bombay Stock Exchange was moved to a new location at the intersection of Bombay Samachar Marg and Hammam Street, the street next to the building was renamed Dalal Street.

In Hindi, Dalal means mediator. The term Dalal Street is used in the same way as Wall Street in the United States, to refer to the country’s major stock exchanges and the financial system as a whole.

To understand the Nifty and the Sensex, one must first understand the Indian equity markets. Let’s look at the two main Indian stock exchanges, the Bombay Stock Exchange and the National Stock Exchange, and their indices.

Bombay Stock Exchange (BSE)

  1. The Bombay Stock Exchange is an Indian stock exchange located on Dalal Street in Mumbai, Maharashtra.
  2. It was established in 1875 and is the oldest stock exchange in Asia.
  3. It is the fastest stock market in the world, with an average trading speed of 6 microseconds.
  4. More than 5,500 companies are listed on the BSE.
  5. The BSE is the 10th largest stock exchange in the world with a total market capitalization of $2.29 trillion in April 2018.
  6. In February 2021, the value of 4,722 companies traded on the BSE exceeded Rs 200 lakh crore (2,0047,191.31 crore), the exchange’s data showed.

What is an index? Since there are thousands of companies listed on the stock market, it is very difficult to track each stock to assess the performance of the market at any given time. Therefore, a smaller sample representative of the whole market is taken. This small sample is called an index and is used to measure the value of a portion of the stock market. The index is calculated on the basis of individual share prices.


nifty and sensex

The Sensex, also known as the BSE 30, is a stock index of 30 established and financially strong companies listed on the Bombay Stock Exchange (BSE).

  • 30 companies were selected based on their free float market capitalization.
  • These are various companies from different sectors which form a sample of large, liquid and representative companies.
  • The base year for the Sensex is 1978-79 and the base value is 100.
  • It is an indicator of market movements.
  • When the Sensex falls, it indicates that the price of most major BSE stocks has fallen. If the Sensex is rising, it means that most of the major stocks of the BSE have risen during this period.

For example, let’s say the Sensex stands at 49,130 today. If the Sensex falls to 48,450 tomorrow, it would mean that most of the 30 companies are performing poorly, which means that their share prices will fall.

List of 30 companies included in the Sensex

Updated November 2023

These are the Sensex 30 companies – Sensex 30 parts by weight

Sr No.Company NameIndustry SectorPercentage Share
1Reliance IndIntegrated Oil & Gas13.36%
2HDFC BankBanks9.65%
3ICICI BankBanks8.78%
4InfosysIT Consulting & Software8.70%
5HDFCPersonal Products6.51%
6TCSIT Consulting & Software5.13%
7Kotak Mahindra BankBanks4.23%
8ITCCigarettes, Tobacco Products4.10%
9Hindustan Unilever (HUL)Housing Finance3.72%
10Larsen & Toubro (L&T)Construction & Engineering3.37%
11State Bank of India (SBI)Banks3.11%
12Axis BankBanks3.05%
13Bajaj FinanceHolding Companies2.63%
14Bharti AirtelTelecom Services2.62%
15Asian PaintsFurniture, Furnishing, Paints2.18%
16Maruti SuzukiPassenger Cars & Utility Vehicles1.85%
17Mahindra & Mahindra (M&M)Passenger Cars & Utility Vehicles1.78%
18HCL TechnologiesIT Consulting & Software1.54%
19Titan CoOther Apparels & Accessories1.53%
20Sun PharmaPharmaceuticals1.49%
21Bajaj FinservFinance (including NBFCs)1.22%
22Tata SteelIron & Steel/Interm.Products1.19%
23UltraTech CementCement & Cement Products1.18%
24Power GridElectric Utilities1.13%
25NTPCElectric Utilities1.12%
26Nestle IndiaPackaged Foods1.07%
27Tech MahindraIT Consulting & Software1.03%
28WiproIT Consulting & Software0.96%
29IndusInd BankBanks0.95%
30Dr. Reddy’s LabsPharmaceuticals0.84%

National Stock Exchange (NSE)

The National Stock Exchange (NSE) is India’s premier stock exchange and is headquartered in Mumbai, Maharashtra, India. It was established to end the Bombay Stock Exchange’s monopoly on the Indian market.

  1. The NSE was established in 1992 as the country’s first electronic exchange with listing.
  2. It was the first exchange in the country to offer a state-of-the-art, fully automated electronic trading system based on screens, allowing investors across the country to trade at their convenience.
  3. The NSE has a total market capitalization of over $2.27 trillion, making it the 11th largest stock exchange in the world as of April 2018.
  4. The NSE index, NIFTY 50, is used by investors in India and the rest of the world as a barometer of the Indian financial market.
  5. In 2020, the NSE remains the world’s largest derivatives exchange in terms of number of contracts traded for the second year in a row.



NIFTY or Nifty 50

The Nifty, also known as the NIFTY 50, is a stock index of 50 established and financially strong companies listed on the National Stock Exchange of India (NSE).

  1. The base year is assumed to be 1995, and the base value is set to 1000.
  2. The Nifty is calculated on the basis of 50 large cap shares actively traded on the NSE.
  3. 50 companies are selected based on their free float market capitalization.
  4. Here the 50 best stocks from 24 different sectors are selected.
  5. The Nifty is owned and managed by India Index Services and Products (IISL).

Also read : Nifty 50

Nifty 50 companies – Nifty 50 parts by weight

1.Reliance Industries Ltd.Energy – Oil and Gas10.77%
2.HDFC Bank Ltd.Bank10.66%
3.Infosys Ltd.Information Technology7.42%
4.Housing Development Finance Corporation Ltd.Financial Services7.29%
5.ICICI Bank Ltd.Bank6.59%
6.Tata Consultancy Services Ltd.Information Technology4.86%
7.Kotak Mahindra Bank Ltd.Bank4.16%
8.Hindustan Unilever Ltd.Consumer Goods3.04%
9.AXIS Bank Ltd.Bank2.87%
10ITC Ltd.Consumer Goods2.84%
11.Larsen & Toubro Ltd.Construction2.78%
12.State Bank of IndiaBank2.39%
13.Bajaj Finance Ltd.Financial Services2.23%
14.Bharti Airtel Ltd.Telecommunications2.13%
15.Asian Paints Ltd.Consumer Goods1.64%
16.HCL Technologies Ltd.Information Technology1.58%
17.Maruti Suzuki India Ltd.Automotive industry1.46%
18.Mahindra & Mahindra Ltd.Automotive industry1.23%
19.UltraTech Cement Ltd.Cement1.13%
20.Sun Pharmaceutical Industries Ltd.Pharmaceutical products1.03%
21.Wipro Ltd.Information Technology0.97%
22.IndusInd Bank Ltd.Bank0.96%
23.Titan Company Ltd.Consumer Goods0.94%
24Bajaj Finserv Ltd.Financial Services0.93%
25.Nestlé India Ltd.Consumer Goods0.92%
26.Tata Motors Ltd.Automotive industry0.92%
27.Tech Mahindra Ltd.Information Technology0.91%
28.HDFC Life Insurance Co Ltd.Insurance0.88%
29.Power Grid Corporation of India Ltd.Energy – Energy0.88%
30.Dr. Reddy’s Laboratories Ltd.Pharmaceutical products0.86%
31.Tata Steel Ltd.Metal0.86%
32.NTPC Ltd.Energy – Energy0.83%
33.Bajaj Auto Ltd.Automotive industry0.79%
34.Adani Port and Special Economic ZoneInfrastructure0.79%
35.Hindalco Industries Ltd.Metal0.79%
36.Grasim Industries Ltd.Cement0.74%
37.Divi’s Laboratories Ltd.Pharmaceutical products0.68%
38.Hero MotoCorp Ltd.Automotive industry0.67%
39.Oil & Natural Gas Corporation Ltd.Energy – Oil and Gas0.65%
40.Cipla Ltd.Pharmaceutical products0.64%
41.Britannia Industries Ltd.Consumer Goods0.63%
42.JSW Steel Ltd.Metal0.61%
43.Bharat Petroleum Corp Ltd.Energy – Oil and Gas0.58%
44.Eicher Motors Ltd.Automotive industry0.56%
45.Sri Cement Ltd.Cement0.56%
46.SBI Life Insurance Co.Insurance0.54%
47.Coal India Ltd.Energy and mining industry0.51%
48.UPL Ltd.Chemical Products0.49%
49.GAIL (India) Ltd.Energy – Oil and Gas0.42%
50.Indian Oil Corporation Ltd.Energy – Oil and Gas0.40%

Value of Nifty and Sensex movements

The Sensex and Nifty are indicators of market movements. If the Sensex or the Nifty is rising, it means that most stocks in India have risen during that period.  The following can be said about NIFTY and NSE:

  1. When the Nifty rises, it means that the price of most of the important NSE stocks has risen.
  2. On the other hand, if the Nifty falls, it means that the price of most of the important stocks on the NSE has fallen.

The same goes for the sensex. Similarly, when the Sensex/Nifty reaches a high level, it is an indication of the economic growth of the country. If it continues to drop, it could mean a slowdown or depression.

Short note
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For example, during the Indian recession of 2008-09, the Sensex index fell by over 12 000 points (-60%). The decline in the Sensex was similar to that of the recession. It means that people were selling their stocks and there was an economic crisis in the country.

Similarly, during the Covid19 pandemic, the market fell by 33% in a month, again due to the deteriorating economic scenario in India and the rest of the world.

Market Index Significance

  1. Stock market indices are a barometer of market behavior. It gives a general idea of whether most stocks are rising or falling.
  2. A market index is often used as a measure of portfolio performance.
  3. It is used as a reflection of investor sentiment.
  4. Market indices are used to sort and compare different companies.
  5. Indices are the basis for index funds, index futures and options.
  6. They are used in the passive management of index funds.
  7. The index can be a means of comparing the return of investments in the stock markets with that of asset classes such as gold or bonds.

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That’s it. I hope this post What is Nifty and Sensex helpful to the readers. Please comment below if you have any concerns. Have a great day and enjoy your investments!

Frequently Asked Questions

What is Sensex and Nifty for beginners?

Sensex is the Indian stock market index, while Nifty is the Indian stock market index. They are both market indices that are used to measure the performance of the Indian stock market. What is the difference between Sensex and Nifty? The Sensex is an index that is used to measure the performance of the Indian stock market. The Nifty is an index that is used to measure the performance of the Indian stock market.

What is stock market Nifty Sensex?

The Nifty is a stock market index of the Indian companies listed on the Bombay Stock Exchange (BSE).

What is nifty and sensex in simple words?

Nifty is a term used in the Indian stock market to refer to the National Stock Exchange of India Limited (NSE) Index. Sensex is a term used to refer to the Bombay Stock Exchange (BSE) Index.

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