SENSEX

The difference between the Sensex and the Nifty 50 index is: Sensex: Sensex was launched by the Bombay Stock Exchange (BSE) Limited. It tracks the top 30 BSE-listed companies. It is operated by the Standard and Poor’s (S&P). It has a base index value of 100 and a base market cap of Rs. 2501.24 Cr. Nifty 50: Nifty 50 was launched by the National Stock Exchange (NSE). It tracks the top 50 NSE-listed companies. It is owned and operated by NSE Indices Limited. The base index value of Nifty 50 is 1000, and the base market cap is Rs. 2.06 trillion.

Yes, BSE Limited is a listed company on the stock exchanges and can be traded amongst investors just like the stock of any other company.

Sensex was first launched on 1st January 1986 and was structured based on the full market capitalisation method.

Yes, you can invest in Sensex either directly or through an indirect method. Under the direct method, you will be required to invest directly in the constituents of the Sensex, which means you have to manually identify and invest in those stocks that are part of the index. But, retail investors may find this method very challenging and expensive because it requires huge capital, knowledge, and skills to invest in constituents of Sensex at the same percentage as they are represented in the index. However, the indirect method assists investors in avoiding the challenges involved in the direct method by investing in the Sensex through Index funds and exchange-traded funds (ETFs). These funds are passively managed by a professional team of fund managers, who structure and formulate them to replicate the behaviour of the Sensex. In these funds, you can invest a small amount of capital at regular intervals through SIPs and other ways. Similarly, Exchange-traded Funds (ETFs) are trading instruments that track specific indexes such as Sensex. They are similar to index funds; however, they differ on the basis that ETFs can be traded on the stock exchanges like other stocks and bonds and are more liquid than index funds.

Yes, you can trade in the Sensex for the short term through the derivative market. The Bombay Stock Exchange (BSE) allows trading in the Sensex index through future and options contracts. However, it is important to note that derivative trading is a risky act, and therefore, traders with high-risk tolerance should trade indexes such as Sensex through the derivative market.

The major constituents of the Sensex are: HDFC Bank ICICI Bank Reliance Industries Infosys LTD. ITC LTD.