The condition of the stock market is analyzed using market indices. Market index value can be derived by:
The value of various stocks or investment tools are combined and expressed against a base value on a specific date to produce an aggregate value.
These indices are used to signify the whole stock market and are used by financial managers and investors to find the return on investments.
Some of the indices are listed below:
1. BSE Sensex
Bombay Stock Exchange Sensitive Index is generally known as BSE Sensex. It is the oldest stock index in India; it is a collection of 30 actively traded stocks in the BSE that represent a cross section of all industries in India. 100 was taken as the base value of this index on 1st April, 1979. This market-weighted free-float BSE Sensex is considered as the stock market pulse in India that is used extensively in BSE trading.
2. NSE Nifty or CNX Nifty
Nifty also known as NIFTY 50 is the stock market index of National Stock Exchange (NSE), the leading stock exchange of India. This index comprises of 50 traded stocks from different sectors on the basis of their capitalization. These cover 22 sectors of Indian economy and provide a wide exposure to the Indian financial market that investment managers can look at. The rise and fall of the NIFTY depends on the price movement of the stocks that it contains and acts as a guide of the capital market in India. There are some common stocks between BSE and NSE trading.
3. CNX Nifty Junior
After forming a part of the 50 stocks of CNX Nifty, the next group of 50 shares of liquid securities in India forms the CNX Nifty Junior. This is computed by the free float market capitalization method. The total free float market value of all the stocks compared to a base value is reflected by the index. The stocks listed in the CNX Nifty and CNX Nifty Junior is exclusive of each other.
4. NSE CNX Mid Cap
As the midcap segment of the share market shows a possibility of high growth, this becomes a rewarding investment option. So a separate index comprising of 100 midcap tradable stocks that are listed in the NSE, tracks the midcap market.