What is NIFTY & SENSEX? What is Index? Share Market Basics Explanation for Beginners | E4

Summary

This educational video from the 'Complete Learning Series of Stock Market Investing and Trading' delves into the fundamentals of the Indian stock market, focusing on NSE and BSE. It explains the significance of NIFTY and SENSEX, which are indices representing the performance of the top 50 and 30 companies respectively. The video also touches on sectoral indices, emphasizing their role in gauging sector-specific market trends. Aimed at beginners, it simplifies complex financial concepts and encourages viewers to join a community for further learning and trading insights.

Takeaways

• 📈 The video is part of a complete learning series on stock market investing and trading, aiming to educate viewers on the basics of the stock market.
• 🌟 Nifty and Sensex are key terms in the Indian stock market, representing indices that reflect the overall market performance.
• 🏛️ There are two major stock exchanges in India: the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), with NSE being newer and having fewer listed companies.
• 🔢 An index is a number that measures or indicates the performance of a particular segment, such as the stock market or a sector within it.
• 🏆 Nifty 50 is an index representing the performance of the top 50 companies listed on the NSE, while Sensex represents the top 30 companies on the BSE.
• 💡 The selection of companies for Nifty 50 and Sensex is based on market capitalization and free float market capitalization, which will be explained in later videos.
• 📊 Indices serve as benchmarks to measure the performance of the stock market and the economy, as well as to evaluate individual investment portfolios.
• 📈 Nifty 50 has historically provided a compounded annual growth rate (CAGR) of around 14%, setting a benchmark for long-term investment returns.
• 💼 Sectoral indices like Nifty IT, Nifty Bank, and Nifty FMCG provide insights into the performance of specific sectors within the stock market.
• 🌐 The video encourages viewers to join a community on the Market Feed app for further learning and interaction with other investors.

Q & A

What is the main focus of the fourth episode of the complete learning series of stock market investing and trading?

The main focus of the fourth episode is to understand what NIFTY and SENSEX are, which are indices representing the stock market performance in India.

Why are NIFTY and SENSEX important in the context of the Indian stock market?

NIFTY and SENSEX are important because they serve as indices that indicate the overall performance of the stock market, which in turn reflects the health of the economy.

What are the two major stock exchanges in India mentioned in the script?

The two major stock exchanges in India mentioned are the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

How many companies are listed on the NSE and BSE as per the script?

According to the script, the NSE has 2,000 companies listed, while the BSE has 5,000 companies listed.

Why are there fewer companies listed on the NSE compared to the BSE?

The NSE is a newer stock exchange compared to the BSE, which was established much earlier in 1875, hence it has fewer companies listed.

What is an index in the context of the stock market?

An index in the stock market is a number that indicates the performance of a group of stocks, representing the overall health of a particular segment or the entire market.

What is the difference between NIFTY 50 and SENSEX in terms of the number of companies they represent?

NIFTY 50 represents the performance of the top 50 companies listed on the NSE, while SENSEX represents the top 30 companies listed on the BSE.

How are the companies included in NIFTY 50 selected?

The companies included in NIFTY 50 are selected based on certain criteria such as market capitalization and free float market capitalization, although the specifics are not detailed in the script.

What is the purpose of sectoral indices in the stock market?

Sectoral indices provide a single number that indicates the performance of specific sectors within the stock market, allowing investors to gauge how individual industry segments are doing.

How can an investor use NIFTY 50 as a benchmark for their investment performance?

An investor can use NIFTY 50 as a benchmark by comparing their long-term investment portfolio's returns to the annual returns of NIFTY 50. If their portfolio performs at least as well as NIFTY 50, it means they have matched the market performance.

Outlines

00:00

📈 Introduction to Stock Market Indexes

The speaker welcomes viewers to the fourth episode of the stock market investing series, emphasizing the importance of watching the videos in order. The focus of this episode is to understand what NIFTY and SENSEX are, which are indices often mentioned in financial news. The speaker encourages viewers to use the table of contents and to download the Market Feed app for trade ideas and to open a broking account. The episode aims to clarify NIFTY and SENSEX, explain why indices are needed in the stock market, and explore sectoral indices.

05:02

🏛️ Understanding the Two Stock Markets in India

The speaker explains the difference between the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), India's two major stock markets. NSE, established in 1992, has around 2,000 companies listed, while BSE, founded in 1875, has over 5,000. The speaker highlights that new companies going public are often listed on both exchanges. The episode aims to provide a basic understanding of these markets before delving into the concept of indices.

10:02

🔢 The Concept of an Index in Stock Market

The speaker introduces the concept of an index as a single number that indicates or measures something. Using the example of a batsman's performance, the speaker explains how an index simplifies understanding complex data. The episode discusses the need for an index in the stock market to gauge the performance of the market and, by extension, the economy. The speaker also touches on the correlation between a country's economy and its stock market performance.

15:03

🏆 NIFTY 50 and SENSEX as Indices of NSE and BSE

The speaker clarifies that NIFTY 50 is the index of NSE, representing the performance of the top 50 companies listed on NSE, while SENSEX is the index of BSE, representing the top 30 companies on BSE. The selection of these companies is based on market capitalization and free float market capitalization, which will be explained in later episodes. The speaker emphasizes that these indices are crucial for understanding the health of the stock market and, by association, the economy.

20:04

📊 Applications and Importance of Indices

The speaker discusses the applications of indices, highlighting their use as benchmarks for long-term investment portfolios. NIFTY 50, for instance, has historically provided a compounded annual growth rate of about 14%, which can be used as a benchmark for evaluating the performance of an investor's portfolio. The speaker also introduces sectoral indices, which provide insights into the performance of specific sectors within the stock market, such as IT, banking, or FMCG. The episode concludes with an invitation for viewers to join the Market Feed community and engage in discussions about stock market investing.

Keywords

💡Stock Market

The stock market is a centralized location where shares of publicly listed companies are issued and traded. It serves as a platform for companies to raise capital by selling ownership stakes in the form of stocks and for investors to buy and sell these shares. In the video, the stock market is the central theme, with discussions on how it operates, its significance in reflecting economic health, and its role in investment strategies.

💡Nifty

Nifty, or Nifty 50, is an index that represents the weighted average of the 50 largest and most liquid Indian companies listed on the National Stock Exchange (NSE). It is used as a barometer for the Indian stock market's performance. The video explains that Nifty is an index, which is a single number indicating the performance of a group of companies, and it is crucial for understanding the overall health of the Indian stock market.

💡Sensex

Sensex, officially known as the S&P BSE Sensex, is the index of the 30 largest and most actively traded stocks on the Bombay Stock Exchange (BSE). It is similar to the Nifty 50 in that it serves as a gauge of the Indian stock market's performance. The video emphasizes the importance of Sensex as a benchmark for tracking the performance of the BSE and the broader economy.

💡Index

An index in the context of the video refers to a statistical measure of changes in a representative sample of companies, often used to track the overall performance of a particular market or sector. The video explains that indices like Nifty and Sensex are crucial as they provide a simplified way to understand the complex dynamics of the stock market.

💡NSE (National Stock Exchange)

The National Stock Exchange of India is one of the largest stock exchanges in India, based in Mumbai. The video mentions that NSE is a newer exchange compared to BSE and lists around 2000 companies. It is significant as it is the home of the Nifty 50 index, which is a key indicator of the Indian stock market's performance.

💡BSE (Bombay Stock Exchange)

The Bombay Stock Exchange, also known as BSE, is the oldest stock exchange in Asia and one of the largest in India. The video points out that BSE has a longer history than NSE and lists around 5000 companies. It is the base for the Sensex index, which is another key indicator of the Indian stock market's performance.

💡Market Capitalization

Market capitalization refers to the total market value of a company's outstanding shares of stock. It is calculated by multiplying the current market price of one share by the number of outstanding shares. The video hints at market capitalization as a criterion for selecting the companies that are included in indices like Nifty 50 and Sensex.

💡Free Float Market Capitalization

Free float market capitalization is a measure of the value of a company that is available for trading in the open market. It excludes shares held by insiders, major shareholders, or state entities. The video suggests that this concept is important for understanding how companies are selected for inclusion in indices such as Nifty 50.

💡Benchmark

A benchmark in the context of investing is a standard or point of reference against which the performance of an investment or portfolio is measured. The video explains that indices like Nifty and Sensex serve as benchmarks for comparing the performance of individual investment portfolios, helping investors gauge their success against the broader market.

💡Sectoral Indices

Sectoral indices are specific types of stock market indices that track the performance of companies within a particular sector or industry. The video mentions sectoral indices such as Nifty IT, Nifty Bank, and Nifty FMCG, which provide insight into the performance of specific sectors within the broader stock market.

Highlights

Introduction to the fourth episode of the stock market investing and trading series.

Emphasis on watching the videos in the right order for effective learning.

Understanding the basics of the stock market and its functioning.

Explanation of the terms 'nifty' and 'sensex', commonly used in the context of the Indian stock market.

Differentiation between the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

Historical context of NSE and BSE, including their establishment years and the number of companies listed.

The concept of an index and its significance in the stock market.

The necessity of an index in understanding the performance of the stock market and the economy.

Definition and function of an index as a measure or indicator in the stock market.

The correlation between the performance of a country's economy and its stock market.

Introduction to Nifty 50 and Sensex as indices representing NSE and BSE respectively.

The calculation and composition of Nifty 50, including the top 50 companies in NSE.

The calculation and composition of Sensex, focusing on the top 30 companies in BSE.

The selection criteria for the companies included in Nifty 50 and Sensex based on market capitalization and free float market capitalization.

Practical application of indices as benchmarks for long-term investment portfolios.

The role of sectoral indices in understanding the performance of specific sectors within the stock market.

Examples of sectoral indices such as Nifty IT, Nifty Bank, and Nifty FMCG.

Encouragement for viewers to engage with the community and utilize the comment section for doubt clarification.

Invitation for viewers to join the exclusive community on the Market Feed app.

Transcripts

welcome to the fourth episode of the

complete learning series of stock market

investing and trading as always i've put

all these videos into a single playlist

the playlist is available here in the i

button make sure you watch all the

videos in the right order learn really

well let's trade together let's grow

together so you've seen the first video

now you know what the stock market does

you also know how the stock market works

and all the basic things around stock

market now if you know that really well

the next thing to know is what nifty is

and what sense success i'm sure you

would have heard these terms a lot of

times in your life even in your

upbringing or if you're watching a news

channel or even if you're watching

youtube channels they always talk about

nifty and sensex sex and nifty points

closed with a cut off nifty was up

hundreds

whatever happens in the stock market

they say that oh nifty is up 200 points

or census is down 500 or 1000 points so

everything in the stock market wherever

you go you hear about nifty and sensex

so our next agenda is to understand what

nifty and send success so it's very

clear so as as always before getting

into a video we always mention the table

of contents in the video right so in

order to understand nifty and sensex the

number one thing to do is to understand

more about the two different stock

markets in india the nse and bsc will be

doing that after that we should

understand what an indexes

okay so before getting into the video

i'll give you some more clarity when we

say nifty and sensex both of them are

indices and indices is the plural of

index so nifty is an index census is

also an index so the second thing to do

in the video is to understand what an

index is the next agenda is to

understand why do we even need an index

in the stock market then we would go

ahead and understand what nifty and what

send success then we'll understand what

is the use of nifty and sensex and

finally we'll also talk about sectoral

indices so these are the agenda of the

video so as always before getting into

the video if you are someone in the

market who has a basic understanding

about the stock market but still not

able to make profits in the market

consistent profits in the market make

sure that you download market feed app

and then you can get free trade ideas

from india's top and the most profitable

traders you can join their live trading

sessions you can also learn from them

directly and also the first thing to do

in order to start participating in the

stock market is to open a broking

account so in order to open a broking

account there is a link in the

description you can go there open a

rocking account of your choice you'll be

getting exclusive benefits so yeah make

sure you watch the video completely with

full focus and attention to understand

all the concepts very very clearly so

without further ado let's get right into

the video the name of charlie shimsuine

welcome to market feed

[Music]

so back to the classroom let's start

learning before we start learning make

sure that you go into the comment

section and mark your attendance for

this session that is a tradition that we

follow here right okay if you've done

that let's start learning

so in today's video as i said we are

going to learn what nifty 50 years and

what census is and to understand that we

have to understand what indexes we also

have to understand the two stock markets

in india so i also hope that you watch

the previous video where we have already

learned about what the stock market does

and the two stock markets in india nse

and vsc so if you have not watched the

video make sure you watch the videos

here in the i button please please do

watch the video and then come into this

video so in that video we've already

discussed stock market is a place where

shares of publicly listed companies are

traded we have learned that we also

learned that there are two different

stock markets in india one is nse

national stock exchange and then we have

bse bombay stock exchange we have

learned that we have also learned that

there used to be multiple stock

exchanges or stock markets in india but

as of now only these two remain so both

of them are based out of mumbai speaking

about nsc nsc started in 1992 bse

started way back in 1875 now one major

differentiator here is nfc has 2 000

companies listed in it whereas bse has 5

000 companies listed in it now in order

to understand more about this okay these

are two different stock markets in india

one has two thousand companies and the

other has five thousand companies now a

simple question can be why two thousand

companies only in nfc and why five

thousand companies in bse now you have

to understand that dac is a way older

stock exchange and for that reason all

the initial companies in india they used

to be listed only in bse but now if you

look at it all the companies which are

going public

by doing their ipo all of today's

companies get listed both in nse and bse

so nse is fairly newer that's why it has

lesser companies so i hope you get the

point today when a company wants to go

public in india they can either be

public or do their ipo in nse or bse but

most of the companies do their ipo and

both and they get listed in both the

exchanges and if you also talk about all

the top companies in india today any

company that you know in india almost

all of them all of them are listed in

both nsc and bsc i hope you have a basic

understanding about the two different

stock markets in india now if you

understand that

our next agenda is to understand what an

index is okay we are going to understand

what an index now in order to understand

what an index is i'm quickly going to

give its literal definition but more

importantly i'm going to give you an

example with which i'm sure you'll

absolutely understand what an index is

but looking at the term index it seems

to be a bit complex right do not worry

at all it is a very very simple thing so

here goes the literal definition

index is a number which measures

something

or

index is a number which indicates

something it is as simple as that so in

this is just a number by looking at that

number we should be able to measure

something or index is a number by

looking at the number we should get an

indication about something

getting a hang of it i'll give you the

example then i'm sure you'll understand

this now

this is an example which i've already

taken in the previous video where we

have talked about benchmarks if you

haven't watched the video super

important video i'm giving the videos

link here make sure that you watch the

video in that video we've taken a taken

an example of how do we judge the

batsman okay i'm asking the question to

you again how do you judge the batsman

now let's take an example of virat kohli

how do we say that virat kohli is a good

batsman how

one way of doing it we can open virat

kohli's entire career we can look into

each of his innings how much runs he

made and we can sum it up look at it and

we can say that okay a lot of indians is

making really good uh

scores so probably we can say that he's

a good batsman now do you think there's

an efficient way of doing it now for

without kohli probably he has played 300

matches so 300 scores we have to look

and understand and then say then judge

his performance then measure his

performance then it would be an

indicator of his performance it's a

difficult thing to do right then what

can we look into you tell me what is

that one single number that we can look

into off without kohi which will tell

him which will tell us that he is a good

batsman

batting average right now batting

average virat ko release i guess it's

above 50. now if you look at its backing

average of 50 it says that now that is a

single number which is a measure of good

performance

now that is a single number which

indicates that he's a good batsman

i hope you're getting it now when it

comes to t20 cricket say someone's

strike rate is 200 now that is a single

number which indicates that he's an

explosive and a good t20 batsman i hope

you're getting this so let's recollect

this again index is a single number

which indicates something or a single

number which is a measure of something i

hope this is super clear for you now

that you understand what an indexes the

next question in your mind will be why

do we need an index in the world of

stock market correct that is what we are

going to discuss next so in order to

understand this we have to understand

one need first which is a country needs

to understand the performance of its

economy correct a country the companies

in its its politicians the government

the common people everybody we have to

or we need to understand the performance

of the economy correct now in order to

understand the performance of the

economy of a country there are multiple

numbers available out there out of which

one is the performance of the stock

market correct

which is you should understand this also

if the economy does well of a country

the stock market will go up if the

economy is doing bad the stock market

will go down that is there is such a

correlation between the economy of a

country and the stock market's

performance of that country so now we

just learned that it doesn't need to

understand the performance of an economy

we also learned that the performance of

an economy can be understood by the

performance of a stock market so the

next question is how do we understand

the performance of the stock markets how

do we understand if the stock market is

doing well or if the stock market is

doing bad

it is very important to understand right

if the stock market of a country is

doing well or bad it is really really

important and that is what we have to do

now question to you again just like i

asked how can we know the performance of

virat kohli i'm asking you how can we

understand the performance of the stock

market in a country how can we

understand if nse is doing well how can

we understand if uh bsc is doing well

how can we do that

so we just said that we just learned

that there are two thousand companies in

nsc and there are five thousand

companies in bsc so in order to

understand if nse is doing well you can

go into the 2000 companies of nse learn

about each of these companies see each

of these companies are doing well and

then you cannot say that if majority of

those companies are doing well you can

say that nds is doing well

right you can do that but do you think

that is an efficient way of doing it

absolutely not right maybe every 30

minutes you would love to know how the

stock market is doing but every day you

need to know how the stock market is

doing so every day you will have to go

to each of these 2000 companies do a

study about them and understand if they

are doing well only then you will be

able to say that if nfc is doing well or

bad so it is really inefficient just

like that it was inefficient to go into

each of innings of virat kohli to

understand his performance so what helps

here

what if there is a single number which

will indicate the performance of nfc

what if there is a single number which

will indicate the performance of bse

that exactly is what a stock market

index does now again making things

really clear for you a stock market

index is a number which tells how the

stock market of that country is

performing now when we know how the

stock market of that country is

performing if it is doing well we can

say that the economy is doing well if

that is doing bad we can say that the

economy is doing bad i hope you really

understand this if that's the case then

let's move ahead into the next segment

so now let's get into the crux of the

topic what is nifty 50 what is sensex if

you've understood so far then it is as

simple as nifty 50 is the index of nse

sensex is the index of bse

it's as simple as that so nifty 50 is a

single number it is somewhere around

seventeen thousand now so seventy

thousand is the number which indicates

the performance of nsa if this goes up

if seventeen thousand if nifty fifty

goes up from seventeen thousand to a

larger a higher number we can say that

nfc is doing well

which means that the companies in nfc is

doing well and if nifty 50 the number

from 17 000 if it's if it goes down we

can say that the companies in nfc is

doing back which in turn we can say that

nsc the stock market itself is going

through a bad phase right now in fact

i'll even give you a better easier

example to understand this which is in

2020 unfortunately kobed hit the country

and all the businesses had to go into

lockdown there was nothing going around

in the economy which means that the

economy was doing bad and what happened

to nse so if the economy is doing bad as

i said earlier the stock market will do

bad so which means that nfc was in a bad

situation and that was indicated by

nifty 50. so nifty 50 before kovid hit

the country was at around 12 000. after

code hit the country it crashed to near

7000 regis it came down so much with

which indicated that stock markets are

doing bad which means that companies are

doing bad which means that the economy

is doing bad and then after uh lockdowns

eased the economy started getting back

up companies started uh functional again

and then the economy was getting better

and we saw nifty also moving up nifty

moved up from 7000 ranges to nearly 18

000 which indicates that the stock

market started to perform well so again

coming to my point which says that nifty

50 is a single number which indicates

how nfc is performing nifty 50 is the

index of nse just like that sensex is

the index of bse so the next question in

your mind will be how was nifty 50

calculated how was sensex calculated

right so in order to understand that

we'll have to revisit the virat kohli

average calculation how did we get to

the average thing we looked into all of

virat kohli's innings how much runs he

scored and then we we arrived at the

average number but it is not the same

case in the world of stock market let's

take the example of 50 50. so as the

name suggests

nifty 50 comprises of the performance of

the top 50 companies in nse

now you might ask me hey sharik why not

that why not all of the 2000 companies

why don't we take numbers from all of

these 2000 companies and then reach at a

single number which is 50 50. no so the

logic behind that is there are 2 000

companies right and out of these 2000

companies there are like really large

huge the largest corporations in the

country there are medium-sized companies

and then there are a lot of small size

companies as well so why do we have to

look into the performance of all these

companies which includes a lot of small

companies not really necessary right so

the logic is let us only look into the

top 50

largest companies in india if they are

doing well it will obviously mean that

the stock market and the economy is

doing well if those top 50 largest

corporations in the country if they are

doing bad then it obviously means that

the economy and the stock market is

doing bad so going by that logic it's

not necessary to include all those total

total small companies into the

calculation what is necessary is the top

companies in the country that is why

nifty 50 takes into consideration the

top 50 companies in india and then it's

it arrives into that single number which

is the index which is what we discussed

earlier now when we speak about sensex

sensex only takes into consideration the

top 30 companies in bse and then it

arrives at then it does the complex

mathematical formula and then it arrives

at the number with sense success now you

might have two doubts here how do they

select the top companies in india so in

order to understand the top companies in

india or top companies in nse you have

to understand certain terms like market

capitalization and free float market

capitalization now do you know them so

in this series in this learning series

going ahead i will be teaching you what

market capitalization is what free float

market capitalization is so i think you

should probably understand more only

then as of now only understand that

nifty 50 is index of fantasy and it

contains the top 50 companies in nse and

sensex contains the top 30 companies in

pse i don't really want you to get into

the complex understanding of how do they

select the top 50 companies how do after

selecting the 50 companies now what is

the mathematical formula behind

calculating the number that nifty is

today which is 70 000 let's not get into

all of those now it is definitely a

topic for another video when i get time

when we are done with the basic learning

i'll definitely do that now before

moving ahead i thought i'll actually

dive deep into nifty 50 and show you the

50 constituent companies in nifty 50

okay so let's go into market field

application to see that now we are in

the market section inside market field

application and under indian indices i

hope you see nifty 50 i hope you also

see global indices here so going into

global indices you see u.s markets

european markets and also asian markets

so it's very

obvious and evident that all of the

stock markets across the world they need

indices which will indicate how that

country's stock market is performing

correct now let's get back into indian

indices and let's click on nifty 50. so

clicking on nifty 50 coming down you can

see see all these companies that you see

here on the screen adani ports asian

paint access bank bajaj all of these

companies are the 50 companies which are

the constituents of nifty 50 today now

again as i said there is a logic behind

selecting this top 50 companies now if a

company goes out of the selection

criteria that company will be removed

from nifty 50 and the new company which

fits into the selection criteria that

company will be intelligently added into

nifty 50 and all of this work is done by

the nse now that you clearly understand

what an index is you also understand

what nifty 50 is what sends success the

next job is to understand is the

application of an index the first

application or the use of an index is

something that we've been discussing so

far exactly what we've been discussing

so far that is an index will indicate

how a stock market is performing and how

a stock market is performing will in

turn indicate how the economy of the

country is performing right so the first

application will use we can

tell that an index is absolutely useful

in telling how the stock market of a

country is performing and that will tell

how the economy of a country is

performing the second application or use

is that an index is used as a benchmark

for genting long-term investment

portfolio

again this is super important very

important for you as a long-term

investor this is something you'll be

practically using throughout your stock

market participating journey very

important to understand now in order to

understand this i hope again you have

watched that uh video that we've done

already where we already talk about

benchmarks it is very important to have

benchmarks in the market with which we

can compare our personal investment

portfolio now okay let me make this very

clear nifty 50 right nifty 50 every year

almost we could say that over the last

15 years every year it has given a cagr

of compounded annual growth rate of 14

percentage now nearly 14 percentage now

don't be worried by hearing the term

cagr compounded annual growth rate just

think that it has given a returns of

nearly 14 percentage nearly 14

percentage every year now this can be

taken or can be this is taken as a

benchmark in the industry now if you

have also been investing into a

portfolio of stocks or a portfolio of

mutual fund for the last 10 or 15 years

but your investment portfolio has only

given say 12 percentage then it's said

that you have not hit the benchmark

because nifty 50 itself give 14

percentage returns so you could have

only put your money into all the 50

stocks in 1550 you could have easily

made that 14 percentage but no you went

the other route you decided to invest

into multiple stocks of your choice you

went and invested in the mutual funds

and you could not even match the

benchmark you performed even lesser than

the benchmark which means that you did

not perform really well right now the

aim of someone who is investing in the

market the minimum aim should be to

match the market which is matching the

benchmark that is every year you look at

how lifted and you also look at how your

long-term investment portfolio did if

your long-term investment portfolio gave

the same returns as that of nifty well

and good now what is the aim what is the

goal the goal is to beat the benchmark

or we can say beat the market so every

year when you are investing for the long

term you should look at how much nifty

50 gave us returns that year and if your

long term investment portfolio give

better than that then you are a

successful investor what do you

understand here benchmark for comparing

for understanding your performance in

long-term investment in the market is

nifty 50. so far i hope all of you

understood everything that is there too

nifty 50 and sensex everything is clear

right but now i have a question for you

if you look into nifty 50 and you see

that nifty 50 is moving up we can

definitely say that the overall stock

market is doing well and the overall

economy is doing well but we also know

for a fact that nsc has different

sectors of companies in it there are it

companies there are fmcg companies there

are pharma companies there are banking

companies right there are multiple

different sectors within nse there are

multiple sectors within bse as well now

if you just look into a single number

that number might say that

stock market is doing well but what if

when the overall stock market is doing

well what if pharma sector is not doing

well how will we know that

do you understand where i am going so we

also need single numbers which will

indicate how individual sectors are

doing which means that we need sectoral

indices and we do have sectoral indices

in the stock market so when we speak

about nse we have nifty i t which is a

sectoral index which is a single number

which will indicate how the i.t sector

is performing it will have the top

companies from the i.t sector in it then

we have nifty bank very important index

right nifty bank has the top banks in

the country and nifty bank is a single

number which will indicate how the

banking sector is doing in the country

uh just like that we have nifty farmer

nifty fmcg nifty realty nifty media and

the sorts now in order to get more

clarity let's come to market field app

again where we can see sectoral indices

here as well we can see nifty bank nifty

auto nifty fincer nifty fmcg nifty it

which we discussed so let's click on

nifty i t

and see these are the constituents of

nifty it all the i.t stocks are not

there but top ip stocks are there as

part of nifty it so these are the

different stocks in 50 just like that we

can go back say probably we can click on

nifty bank and these are the

constituents of nifty banner so sectoral

indices are just numbers but just by

looking at those numbers we can

understand how that sector inside the

stock market is doing so just like nse

has sectoral indices bse also has

sectoral indexes to show how the

different sectors in pse is doing so

yeah that is all there is to this video

so you came into this video probably

hearing about nifty and sensex somewhere

now you have real clarity absolute

clarity on what these are so these are

very basic terms when it comes to the

world of stock markets so very important

to know this in the beginning as well so

moving ahead a lot more complex concepts

are coming your way so in case you have

understood everything about what an

indexes what nifty 50 is what sensex is

then make sure that you hit the like

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there so that is there also make the

make use of the comment section now i

see the comment section as a doubt

clearing uh place so you can go there if

you have any doubt related to the video

make sure you ask your doubts there

either me or my team will make sure that

we give

clarity to your questions there right

and also as i always tell this is not

just a learning program that we are

doing here we are building india's best

stock market community here right so

invite your friends family and the

people you know

share the video with them and invite

them to join and be a part of the

community so that is it from my side for

today so let's learn trade invest and

grow together see you in the next

episode bye-bye

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