Share Indexes can be associated with the prosperity of the Market. Share market indexes are the standard benchmark set in the markets. If these indexes show a good run then the market is bound to go bullish and if not that then bearish. Pretty much the whole of the share market revolves around these indexes. These can also be regarded as a group of shares. The price of an index is calculated by taking into account every share present no matter how insignificant. These indexes pretty much represent the whole of the share exchange whose shares are listed on it.

Two main share indexes in India:

• Sensex: It is the market index of the Bombay Share Index. It has a total of 30 companies listed on it. These companies are chosen based on different factors such as liquidity, market cap, revenue, etc. Only the top 30 make the cut to be listed on Sensex. Moreover, it is the oldest market index so it is considered as the prosperity measurer of the market or even sometimes the Indian economy indicator. Fluctuations in the price of Sensex are due to the fluctuation in share prices that it is comprised of. An increase in the price of Sensex refers to the increase in its constituent shares and the same is the case with a decrease.

• Nifty: It is also a benchmark index similar to Sensex but not it. It is the index of the National Share Exchange. It is a group of top 50 shares listed on the NSE. All of these shares which are listed on Nifty belong to a total of 24 different diverse sectors. These sectors include IT, automobiles, etc. Any company to get its share listed on Nifty needs to have its shares sold at a mean cost of 0.5% or fewer than that in the last 6 months. Also, the company should readily be listed on the National Share Exchange. Shares listed on it come from as diverse as 24 different sectors. The base capital of Nifty is ₹2.06 billion. 

Perks of stock market indexes:

• Choosing stock: There are more than 1500 company shares listed. Choosing one among them is not an easy task especially for the newbie. A stock market index helps these traders choosing stocks. The traders can choose the ones listed in the index as the index only houses the top shares.
• Eases investment process: Trades choosing the stocks listed herein need not do a copious amount of research before investing. As the stocks have already been discussed and researched at length before they are listed on the Index.

Conclusion:

Share indexes are unique for every share exchange. These indexes are owned and operated by the share exchanges it represents usually but not every time. For instance, Sensex is controlled and owned by BSE whereas nifty is owned and managed by IISL, which turns out to be a subsidiary of NSE.

If you want to start investing in the stock market you can open a Demat account with 5paisa.