The Stock Market Index When we want to know about the trends in the market, we need to analyze few of the important companies in each industry. The important companies are pre-packaged and continuously monitored to give you this information. This pre-packaged market sentiment indicator is called 'Stock Market Index'. Two important indices representing BSE and NSE are S&P BSE Sensex and The Nifty 50 respectively. Practical Uses of the Index 1)Information:- Info about the market trends, up index indicates that people are optimistic, and a down index indicates a pessimistic future. 2)Benchmarking:- Index can be used to analyze the returns you get in comparison with the index. The objective of market participants is to outperform the index. 3)Trading:- Most popular use of the index is trading it, majority of traders in the market trade the index. There are certain indices representing specific sectors, these are called sectoral indices.E.g. the Bank Nifty on NSE represents Bank Sector
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