Market structure & regulation
What is Stock market index?
Also called: Index
Hinglish mein padhein: Stock market index kya hota hai?
An index tracks the combined price movement of a chosen basket of stocks, giving one number for how that part of the market is doing.
Most Indian indices weight each stock by its free-float market capitalisation, so bigger companies move the index more.
Indices exist for the broad market (Nifty 50, Sensex), sectors (Nifty IT, Nifty Bank) and themes. They are also used to benchmark mutual funds.
Related terms
- Nifty 50The Nifty 50 is NSE's flagship index of 50 large companies across sectors, weighted by free-float market capitalisation.
- SensexThe Sensex is BSE's benchmark index of 30 large, liquid companies, weighted by free-float market capitalisation.
- Index fund and ETFIndex funds and ETFs simply copy an index like the Nifty 50 instead of picking stocks. ETFs trade on the exchange like shares.
- Free floatFree float is the part of a company's shares available for public trading, excluding promoter and other locked-in holdings.