InvestorQ : what is indices in Indian Market?
charan y made post

what is indices in Indian Market?

Answer
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Deepa Salunkhe answered.
1 year ago


The index is a selection of stocks which represent the market as a whole. For example, the Nifty 50 is a representative index of the NSE while the Sensex is the representative of the BSE. These are the general indices. Then there are many sectoral indices like indices for banking, commodities, FMCG, pharma etc. Thousands of companies list their shares on the Indian share markets.
You obviously cannot create an index with all the listed stocks. From these, a few large and significant stocks are grouped together to form an index. The classification may be on the basis of company size, industry, market capitalization, or other categories.
The BSE Sensex includes 30 stocks and the NSE comprises 50 stocks. Others include sector indices like the Bankex, market cap indices like the BSE Midcap or the BSE Smallcap, and others. Normally, there are no mid-cap stocks in general indices and they are covered by separate mid-cap indices.

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