Key idea
Two famous numbers that stand in for the whole market's mood. They are baskets of big companies, tracked as a single figure.
You hear them daily: "the Sensex rose," "the Nifty fell." Both are indices, single numbers that summarise the performance of a basket of large companies, giving a quick read on how the broad market is doing.
The two headline indices
| Index | Basket | Exchange |
|---|---|---|
| Sensex | 30 large companies | BSE |
| Nifty 50 | 50 large companies | NSE |
What an index actually tells you
When the Nifty 50 goes up, it means the fifty large companies in it, on balance, rose in value that day. It is a thermometer for the market, not a thing you can buy directly, though index funds (later in this domain) let you track it. Because these baskets hold the biggest companies, they reflect the large-cap part of the market especially.
An index is a barometer: a fast way to see whether the market broadly went up or down. It says nothing about any single stock you own, only about the crowd. Daily levels move constantly, so the number itself matters less than the trend over time.
Finished reading?
Marking this complete counts today, and your streak becomes day 1.