S2 E7 : WHAT IS NIFTY 50 & SENSEX ? WHY IT MATTERS
🤔 Ever Heard These on TV?
“Nifty is up 150 points today!”
“Sensex touches an all-time high!”
“Markets crash as Nifty tanks!”
You’ve probably heard these words everywhere.
But what exactly are Nifty and Sensex?
Let’s explain step-by-step.
🎡 Imagine a Giant School Fair…
In the fair, there are 5,000 students.
It’s hard to track all of them.
So the principal says:
“Let’s just pick the top 50 students from different classes.
If they’re doing well, it means the whole school is doing well!”
That’s what Nifty and Sensex do.
They track the top companies of India — not all 5,000.
🟦 So What is Nifty 50?
- It’s an index of top 50 companies in India
- From different sectors: tech, banks, oil, FMCG, pharma
- Created by NSE (National Stock Exchange)
💡 Nifty shows how the Indian economy is doing, based on these 50 giants.
🔹 Examples of Nifty 50 Companies:
Oil & Energy: Reliance
Banking: HDFC Bank, ICICI
IT: Infosys, TCS
FMCG: Hindustan Unilever, ITC
Auto: Tata Motors, Mahindra
These companies are leaders.
When they rise, Nifty rises.
When they fall, Nifty falls.
🔴 What is Sensex?
- Sensex is older cousin of Nifty
- Made by BSE (Bombay Stock Exchange)
- Tracks top 30 companies in India
💡 Think of Sensex as:
“India’s 30 biggest companies’ report card”
📈 Why Do People Watch Nifty/Sensex?
Because:
- They show the mood of the market
- Help you know when to buy or stay calm
- Tell if the country’s top companies are doing well
🔍 Real-Life Use:
If Nifty goes up, it usually means:
- Companies are growing
- Investors are confident
- You might earn profits
If Nifty drops hard:
- There might be bad news (war, recession, inflation)
- People start selling in panic
🧠 Recap (Quick Check)
✅ Nifty = Top 50 companies, NSE
✅ Sensex = Top 30 companies, BSE
✅ Both show how India’s top companies are performing
✅ If Nifty/Sensex go up, market is happy
✅ If they fall, market is nervous