Stock Index

Hello friends. In this particular video, we are going to talk about Major Stock Indexes in the Indian Stock Market. So, in this particular video we are going to cover 3 main topics. What is Stock Index? And How You’re going to Analyze this Stock Index? Second thing that we’re going to talk about is What is SENSEX and How you’re going to Analyze it? And third thing we’re going to cover is What is Nifty and How you’re going to Analyze It? And the most important part which is for Regular Traders, how you’re going to co-relate SENSEX and Nifty and how you can differentiate the performance of SENSEX and Nifty. So, we are going to help you to know different kind of information that you might not be aware as of now. So, to start with, we’re going to cover this stock index information. So, talking about what is stock index? So, stock index it is a, for example we are taking a fixed number of companies and using their performance and trends in the market to average out the performance and trends of the market, that is going to make your stock index. It is simply explained how the stock index can be made. for example, let us take, example of 1000 companies, so, out of 1000 companies there might be significant 50 companies that have maximum capitalization within the market. So, we’re going to, so, stock market consist of taking that 50 number of companies, So, those 50 number of companies are having some performance and trend within the span of time. So, the stock index indicates their performance and trends over a period of time and the stock index indicates overall performance of that group of companies and this way you’re going to analyze whether the market is, overall market, because it is going to indicate overall market growth and decline. So, we are going to cover this stock index information in more details with these two examples because in India there are major stock indexes. First one is SENSEX, which represents for BSE Companies and second one is NIFTY which represents for NSE Companies. Now, we are going to cover both the indexes in more detail that is going to give you very valuable information as well as, clear many of the doubts. Now, let us talk about what is SENSEX? It indicates, again. SENSEX index is similar to the definition of Stock Index that we have learned so far. Now, what is SENSEX? SENSEX is just indicates average of performance and trends of the market for BSE Top Companies.Now, BSE you always, you’re always, you already know that BSE is Bombay Stock Exchange. So, the top companies that are listed in within BSE, SENSEX, indicates average of the performance and trends of the market for BSE Top Companies for example, if you see this graph, this graph might consist of top 30 companies within BSE listed companies. Let us say example, there are 500 companies within BSE which are listed with in BSE and this graph consists of top 30 companies, in this graph, the performance of top 30 companies have been combined and the trend has been shown for example, if you see this graph, this particular area shows the position of the, combination of top 30 companies how they have been forming in a combination manner, the combined manner. Now, within this, within this graph, you see here there has been some average part and then there has been some decline then again there has been some sudden growth and now there has been small decline, again, the consistency remains but there has been some decline and that has been consistently declining. This way, you are going to understand that overall market is declining as of now with this graph but now you are going to have a doubt that it is not right to invest in that company or in this BSE listed companies because the market is declining as of now but that might be the fact that you should be going with. because there can be, because that, real analysis is the real part. If you analyze this SENSEX with top company there might be out of, because this, for example, this graph, particular graph, consists of 30 companies now, out of 30 companies there might be fact that there are high companies that are regularly performing very well. So, you must not generalize this SENSEX graph and make your decision. You should be carefully analyzing each of the company and you should be getting all the information about their past record of that company. For example, if I’m a daily trader and I just see this SENSEX graph and just saw on my laptop I just started this is declining and then I makeup my mind or I’m not going to invest today because the market is declining day by day so, I’m going to play safe game but that might not be the right case. because it might be true that my company for example, there might be some set of companies in which I have already been leaving but it might be true that those companies are not performing well and their not really inline with this graph but there might be some companies that are still doing good. So, you might always want to know what, who are the top gainers who are the top losers and for the top gainers there might be some new, new, new top top gainers so you should be able to analyze why this stock gainers have been in the gainers list and how they are, how to, what are the facts that has made them to gain more and this way you can make your day trading more smoothly and without any risk you just keep on analyzing each of the company and then you can just avoid 7 generalizing this SENSEX graph because many of the traders sometimes generalize this SENSEX graph and when they see it with new decline they just kept worried about the investment this season. So, we hope that the, you are not generalizing this SENSEX graph and this way you are going to carefully analyze each of the top gainers as well as losers, and make your lessons and take your decisions accordingly. Then, again, what is Nifty? Nifty is a NSE listed Top Companies, NSE, the SENSEX that we just talked about is for BSE listed companies and this Nifty which is for NSE listed top companies. For example, this particular graph is for top companies there might many graphs for example you might be looking for the graph for within health sector. Yes you can obtain that kind of graph so, we just talk about, right now, we just talking about the top companies because much of the time you’re going to have such kind of graph that shows you the performance of top companies within NSE or BSE of course, within NSE and BSE you can obtain particular graph based on your interest Now, in NSE we do the same definition like we had just understood about the SENSEX but what the difference is that here these are NSE listed companies and within SENSEX it has been BSE listed companies. So, in NSE listed companies it might be different scenario as well because if you see this graph, again this graph is combination of top 30 or 50 companies that have been performing over the period of time and what has been the combined performance like SENSEX. So, here we also, we can see that there has been continuous decline. Now, again, the same information applies here because if you’re going to just generalize this data you’re going to think like oh today is bad day for stock market and then we’re going to put any money anywhere this might be the wrong decision because yes, we understand that we’re out of top 30 performing companies, there might be 25 top performing companies that are just doing so bad as of now but still there might be 5 companies that you need to really carefully analyze what has been their past performance and what has been the factor behind their gain. And then, you can do your day trading more effectively rather than just putting your eyes off your laptop or your work area. So, you really need to think about this graph, yes that is true because graph indicates overall market condition but you also need to think about each individual companies because that is where you’re going to make your decision more accurately. Now, we’re going to let you know one more perception that people are having about Nifty and SENSEX, moreover whenever we talk about Indian market, we just generalize one thing if, for example, if SENSEX has such kind of performance that it is falling then Nifty might be falling as well. Yes it happens in Indian market condition because the capitalization and decapitalization are separate topic but within India there are some political factor, then other policy factor by the government that shows similar kind of performance of Nifty as well as SENSEX. Both might be declining at the same time and both might be having upward trend at the same time but you should now generalize that once the SENSEX has fallen the Nifty is also (falling) the same way because again as you already know that this the combined performance of top companies within each group. So, that doesn’t mean that if Nifty performance is continuously declining then SENSEX performance might be the same way. Now, it might not be the real fact. It depends highly on the average of the, on the performance of the companies that has been listed within that particular group whether it is NSE or BSE. So, you should now generalize if this one is falling and that one is also falling and today is the bad day for Indian Stock Market let’s stay away from this 1 just doing generalize. Think again twice thrice and just think about individual companies, think about their past performance and just analyze the graph of those companies. So, this way the traders who are dealing day to day basis they’re going to make their investment safely as well as without any risk of course this is really important for day traders daily basis day traders. Now, summarizing this video, is, we just talked about what is stock, stock index? What is SENSEX and How you’re going to Analyze it? What is Nifty and How you’re going to Analyze it? And how the co-relation between these 2 is and what are the perception you might be having and how to avoid that. And, what kind of analysis you should be doing after you watch the performance of SENSEX index as well as Nifty index. We hope this video has been helpful for you, keep on watching our series of videos. Thank you, good bye, take care.