What are Share Prices? Do changes in Sensex affect the share prices?

What is a Stock?

The Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) are the popular stock exchanges in India. The Bombay Exchange Sensitivity Index or “Sensex” is a number that is figured out as the 30 largest and most actively traded stocks on the BSE. Nifty index is a number computed for the top 50 companies listed on the National Stock Exchange(NSE).

Both these two indexes can provide an insight into the performance of the Indian share market. Market players examine the changes in their value over time and use various strategies as a basis for their trading.

Share prices and the Sensex

Although the BSE stock price listing has many companies, this index is calculated for the stocks that match to leading companies across a wide range of sectors in the BSE. These shares contribute to more than 50% of the total market capital in the BSE. In this way, a country’s stock exchange index is a fast way to find out and compare the performance of various markets.

The Sensex is an indicator of the strength of the market. This adjustment in this number shows whether the prices of most shares have gone up or come down. The Sensex share price may increase or decrease. Let’s look into the various ways.

Rise in sensex:

The rise in sensex shows that the share prices of the major companies have increased and the companies are positioned well. This represents that their investors or shareholders are earning more.

Fall in sensex:

The fall in sensex shows that the share prices of the major companies have decreased and the companies are not positioned well.

The Sensex India is insightful of the Indian economy. If the leading companies are positioned well, it urges the economy onto a growth lane. This indicates that people can expect an economic improvement in the country.

How to interpret the share market through the Sensex?

Aspects like new about the company or country impel the movement of the Sensex. The share prices go up when there is positive news about the company and the Sensex goes up too. Similarly negative news about the company brings down the Sensex.