IAMBChapter 3

Step 1 of 7 · Hook

Sensex and Nifty · 6 minute read

What are Sensex and Nifty, and why do they move all day?

They are on every news screen, every day. Here is what these two scoreboards really are, and what a big scary number means for you.

Step 1 of 7 · Hook

The morning panic

The Broke Squad

3 members

Dhvani

nifty is down 300 points 😭 is he okay

9:20

Tanishq

who is nifty

9:20

Dhvani

you do not know nifty?? he is always on the news with sensex

9:21

Tanishq

are they friends or dating

9:21

Nemi

They are not people, you two.

9:22

Dhvani

then why does everyone say Nifty fell like he tripped

9:23

Nemi

Fair question. Here is the real one: what are Sensex and Nifty, and why do they move all day?

9:23

Step 2 of 7 · Guess

Guess first

The news says, "Sensex is up today." What does that actually mean?

Yes. Sensex is a scoreboard for 30 big companies. Up means most of them, counted by size, rose. Let us build one.

Step 3 of 7 · Build

Build your own mini index

Share means a tiny piece of a company. If you own a share, you own a small slice of it. When people want the share, its price goes up. When they do not, it goes down.

An index is like a class scoreboard for the biggest companies. Tap to add companies to a mini index and watch its score. Big companies count for more, just like a big kid's vote counts for more in a very unfair class.

These five companies and their moves are made up. The score starts at 1,000 points. Points are just a score, not rupees.

Mini index score1,006.4

Moved todayUp 0.64%

Companies added2 of 5

Dashed line = the starting score of 1,000

Now add the other companies.

Step 4 of 7 · Concept

So who are Sensex and Nifty?

Exchange means a marketplace where shares are bought and sold. India has two big ones. Each keeps its own scoreboard.

Tap to meet each one.

Sensex

Home: BSE, the Bombay Stock Exchange. It started in 1875 and is the oldest in Asia.
Tracks: 30 big companies
Name: Short for Sensitive Index, because it reacts quickly to the market

Nifty

Home: NSE, the National Stock Exchange
Tracks: 50 big companies
Name: Short for National Fifty

Many of the same big companies sit in both. So the two usually move the same way on the same day, like twins who wear different shirts.

The market is open on weekdays from 9:15 in the morning to 3:30 in the afternoon. Share prices keep changing all that time, so the scores keep moving too.

Step 5 of 7 · Why it matters

Points scare. Percent explains.

A headline says the index moved by some points. That sounds huge. But is it? It depends on how high the index is. Pick a headline size, then pick the index level. These levels are made up.

Headline says the index moved 300 points

Drag the slider

The index is at…

The move as a percent1.20%

Dashed line = 1%

If you had ₹10,000 in this index, that move is about ₹120.

Around 1%. A busy but ordinary day. No need to panic.

Step 6 of 7 · Before and after

Same headline. Two reactions.

The headline says, "Sensex crashes 800 points." Tap to see each reaction.

Sees the number. Panics.

First thought: "Eight hundred!! It is over!"
What happens: Sells everything before lunch
Result: Locks in a loss over a number nobody checked

Turns points into percent.

First thought: "800 out of about 80,000. That is 1%."
What happens: Asks why it fell, checks the plan, then does nothing
Result: Stays calm and stays in the plan

Tanishq

so a crash headline is just a big number with no context?

9:40

Nemi

Often, yes. Always ask: how many percent?

9:40

Dhvani

but it still feels scary when it is red 😭

9:41

Nemi

It is allowed to feel scary. Just check the percent before you act.

9:41

Tanishq

okay. i need both of you. then i will open the app

9:42

Step 7 of 7 · Answer

Last one. What do you do first?

The headline says, "Sensex crashes 800 points." What is your first move?

Yes. A number without a percent is just noise.

Points scare. Percent explains.Turn every big number into a percent before you feel anything.

Next chapter

Day trading versus index funds

Can buying and selling every day beat just holding a boring index fund? We check with real numbers.

IAMB explains money basics. This is not advice to buy or sell anything. All companies, prices and index levels here are made up so the maths stays simple.

Why this topic: Sensex and Nifty lead every daily market report. See an example on The Sunday Guardian.

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