NSE NIFTY - BSE SENSEX Calculation Method

NSE NIFTY - BSE SENSEX Calculation Method

NSE Nifty

"Nifty" - The Main Index of National Stock Exchange (NSE). CRISIL NSE Index 50 or S&P CNX Nifty nicknamed Nifty 50 or Nifty. Nifty is the leading index for large companies on the National Stock Exchange of India. The Nifty is a well diversified 50 stock index accounting for 22 sectors of the Indian economy. The S&P CNX Nifty stocks represent above 60% of the total market capitalization of the National Stock Exchange of India. The base period for the S&P CNX Nifty index is November 3, 1995, which marked the completion of one year of operations of NSE's Capital Market Segment. The base value of the index has been set at 1000.The base capital is Rs 2.06 trillion. If you want more stuff read Here.

BSE Sensex

"Sensex" - Calculated on a "Market Capitalization-Weighted" methodology of 30 component stocks representing large, well-established and financially sound companies across popular sectors. The base year of SENSEX was taken as 1978-79. SENSEX today is widely reported in both domestic and international markets through print as well as electronic media. It is scientificallydesigned and caculation is based on globally accepted construction and review methodology. Since September 1, 2003, SENSEX is being calculated on a Free-float market capitalization Methodology. The "free-float market capitalization-weighted" methodology is a widely followed index construction methodology on which majority of global equity indices are based; all major index providers like MSCI, FTSE, STOXX, S&P and Dow Jones use the free-float methodology.
SENSEX Calculation Method:
SENSEX is calculated using the "Free-float Market Capitalization" methodology, wherein, the level of index at any point of time reflects the free-float market value of 30 component stocks relative to a base period. The market capitalization of a company is determined by multiplying the current market price of its stock by the total number of shares issued by the company. This market capitalization is further multiplied by the free-float factor to determine the free-float market capitalization.
The base period of SENSEX is 1978-79 and the base value is 100 index points. This is often indicated by the notation 1978-79=100. The calculation of SENSEX involves dividing the free-float market capitalization of 30 companies in the Index by a number called the Index Divisor. The Divisor is the only link to the original base period value of the SENSEX. It keeps the Index comparable over time and is the adjustment point for all Index adjustments arising out of corporate actions, replacement of scrips etc. During market hours, prices of the index scrips, at which latest trades are executed, are used by the trading system to calculate SENSEX on a continuous basis. Read more here