What Are Stock Market Indices?
Stock market indices are tools that track the performance of a group of stocks. They represent a particular segment of the market and act as barometers of market sentiment.
Purpose of Indices
- Measure overall market performance
- Track sector performance
- Benchmark portfolios
- Used as underlying for ETFs and derivatives
Calculation of Indices
Free-Float Market Cap Weighted Index (e.g., NIFTY 50, SENSEX, Bank Nifty)
Index = (Sum of Free-Float Market Cap of Constituents / Base Market Cap) × Base Index Value
Price Weighted Index (e.g., Nifty 50)
Index = (Sum of Stock Prices) / Number of Stocks
Top Companies in NIFTY 50 (as of 2025)
| Company | Sector | Weightage (%) |
|---|---|---|
| Reliance Industries | Energy | 10.5% |
| HDFC Bank | Banking | 9.4% |
| ICICI Bank | Banking | 7.8% |
| Infosys | IT | 6.9% |
| TCS | IT | 5.6% |
| ITC | FMCG | 4.2% |
Top Companies in SENSEX (as of 2025)
| Company | Sector | Weightage (%) |
|---|---|---|
| Reliance Industries | Energy | 11.3% |
| HDFC Bank | Banking | 10.1% |
| Infosys | IT | 8.7% |
| ICICI Bank | Banking | 7.5% |
| TCS | IT | 6.4% |
| Bharti Airtel | Telecom | 3.5% |
Top Companies in Bank Nifty (as of 2025)
| Company | Sector | Weightage (%) |
|---|---|---|
| HDFC Bank | Banking | 30.1% |
| ICICI Bank | Banking | 20.7% |
| State Bank of India | Banking | 15.2% |
| Axis Bank | Banking | 12.3% |
| Kotak Mahindra Bank | Banking | 9.4% |
Conclusion
Stock market indices offer insights into market trends and investor sentiment. Whether you're a trader or long-term investor, tracking indices helps in smart decision-making.
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