How does the Sensex or Nifty work?

Sensex and Nifty are benchmark indices of the Indian stock market. The Sensex represents the 30 largest and most actively traded stocks on the Bombay Stock Exchange (BSE), while the Nifty 50 includes 50 such stocks listed on the National Stock Exchange (NSE). These indices reflect the overall market movement and investor sentiment. They are calculated using a free-float market capitalization method, which considers only the shares available for trading. When the prices of these stocks rise, the index goes up, and when they fall, the index declines. Investors and analysts use them to gauge market trends, measure portfolio performance, and make informed investment decisions.