STOCK MARKET

INDICES
SIMPLE STEPS WITH HUGE IMPACT

MEANI NG

A stock market index statistically summarises the

movements of the market in real-time. A stock
market index is created by selecting similar kinds
of stock from a market or exchange and
grouping
them together.

TYPES OF INDICES

We have t w o m a j o r s t o ck ex ch an g es i n India:
1.B o m b a y S t o ck E x c h a n g e (BSE)
2. N a t i o n a l St o c k E x c h a n g e (NSE)

Sectoral Indices: B o t h exchanges, NSE a n d BSE

also hav e s o m e i n d i c a t o r s t h a t are a g a u g e o f
c o m p a n i e s f a l l i n g u n d e r o n e p a r t i c u l a r sector. I nd i c es
l i ke NSE P h a r m a a n d S&P BSE H e a l t h c a r e are
i n d i c a t o r s of t h e i r r es pec t iv e e x c ha n g e s for t h e
p h a r m a c e u t i c a l sector.

Other indices: There are also s o m e o t h e r ind ic es like

S&P BSE 100, S&P BSE 500, NSE 100 a m o n g ot h er s
w h i c h are sligh tly b i g g e r ind ic es a n d have a m u c h
b i g g e r n u m b e r of stocks li st e d o n t h e m

Market-cap based indices: M a r k e t cap, is t h e m a r k e t

v al u e of a n y p u b l i c t r a d e d c o m p a n y. I n d i c es l i k e
NSE s m a l l c a p 5 0 a n d S&P BSE s m a l l c a p are i n di c es
t h a t are a c o l l e c t i o n of o n l y t h o s e c o m p a n i e s t h a t
ha v e a l o w e r / s m a l l e r m a r k e t c a p i t a l i z a t i o n i n
a c c o r d a n c e w i t h rules b y Sebi.