Short answer: The Sensex and the Nifty are both stock market indices, which are single numbers that summarise how a group of shares is performing. The Sensex tracks 30 large, established companies listed on the Bombay Stock Exchange, while the Nifty 50 tracks 50 large companies listed on the National Stock Exchange. Both are weighted by free-float market value, and their headline levels differ widely, so the two should be compared by percentage change.
Last reviewed: 3 November 2026
At a glance
| Feature | Sensex | Nifty 50 |
|---|---|---|
| Stock exchange | Bombay Stock Exchange | National Stock Exchange |
| Number of companies tracked | 30 | 50 |
| Weighting method | Free-float market capitalisation | Free-float market capitalisation |
| Headline level | Much higher, because it started from a lower base in an earlier year | Lower than the Sensex |
| How to invest | Through index funds or exchange-traded funds that mirror it | Through index funds or exchange-traded funds that mirror it |
What does the Sensex actually measure?
The Sensex follows 30 companies that are large and well established and are listed on the Bombay Stock Exchange (BSE), one of India’s two main stock exchanges. A listed company is one whose shares can be bought and sold on an exchange. The index combines these 30 companies into one figure that rises or falls as their combined value changes.
The Nifty 50 does the same job for 50 large companies listed on the National Stock Exchange (NSE). Because it has more companies, it spreads its movements across a wider set of businesses. Both indices are meant to give a picture of the large end of the Indian market.
How are the companies weighted?
Weighting decides how much each company influences the index. Both the Sensex and the Nifty are weighted by free-float market capitalisation, so a company with a larger publicly tradable share of its market value carries more weight. Market capitalisation, or market cap, is a company’s share price multiplied by its total number of shares.
Free-float market capitalisation takes that market value and scales it by the share of the company’s shares that are actually available to the public. Shares held by promoters, meaning the founders or controlling owners of the company, are excluded. Suppose, purely as a hypothetical example with invented figures, a company has a market value of Rs 1,000 crore (one crore is ten million rupees) and its promoters hold 60% of its shares. Its free float is 40%, so its free-float market value is Rs 400 crore, and that is the figure the index uses.
The catch is that a few heavily weighted companies can move the whole index. If one large company with a big free float falls sharply, the index can fall noticeably even when many smaller constituents rise.
How is the index value calculated?
An index value is found by dividing the current total free-float market value of its constituents by the total from a fixed starting point, called the base period, and then multiplying by the base value. The base value is simply the number the index was set at during that starting period.
Here is a hypothetical example with invented numbers. Suppose the base-period total is Rs 2,000 crore, the base value is 100, and today’s total is Rs 3,000 crore. The index value is 3,000 ÷ 2,000 × 100, which equals 150. The index has risen by 50% from its base, even though no number in this example comes from the real market.
Why can’t the Sensex and Nifty levels be compared directly?
The Sensex shows a much higher headline level than the Nifty. This is because the Sensex started from a lower base in an earlier year, so the same growth in market value produces a larger-looking number on the Sensex scale. A higher number does not mean the Sensex has done better.
For this reason, index levels cannot be compared directly. To compare how the two have performed, look at the percentage change over the same period for each index. A move from 100 to 110 and a move from 40,000 to 44,000 are both 10% gains, even though the raw numbers look entirely different.
Can you invest in the Sensex or Nifty directly?
Neither index can be bought directly, because an index is a calculation and not a security. Investors who want exposure to an index do so through index funds or exchange-traded funds (ETFs) that mirror it. An index fund is a mutual fund that holds the same companies in roughly the same proportions as the index. An ETF is a fund whose units trade on an exchange like a share.
These products follow the index, so their returns will differ from the index’s percentage change by their own running costs and tracking differences. Their value can also fall when the index falls. Reading the fund’s own documents explains how it tracks its index and what it charges.
Frequently asked questions
Is the Sensex better than the Nifty?
The two indices measure different sets of companies, so neither is better in a general sense. Compare them by percentage change over the same period, not by their headline levels.
Why does the Sensex show a bigger number than the Nifty?
The Sensex started from a lower base in an earlier year, so its headline level is much higher. The size of the number does not reflect performance.
Can I put money into the Sensex directly?
No, neither index can be bought directly. Exposure is available through index funds or exchange-traded funds that mirror the index.
Sources and last check
Facts in this article were checked against the sources below on 3 November 2026. Rules and figures can change; check the primary source before acting.
- 5paisa.com (broker education)
- groww.in (broker education)
- upstox.com (broker education)
- icicidirect.com (broker education)
- kotakneo.com (broker education)
This article is general information, not investment advice. MyFinanceBandhu is not a SEBI-registered investment adviser.
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