As we have informed in our earlier posting let us describe about Index as well. Whenever we speak about any Market in the world we are also used speak about the INDEX otherwise called INDICES

What does it mean and how it is derived?

As far as Indian Share markets are concerned, there are two important index numbers. One is called SENSEX and other one is NIFTY. SENSEX stands for SENSITIVE INDEX and NIFTY stands for NATIONAL STOCK EXCHANGE IN FIFTY.


There are more than 5000 companies listed here. But all the shares of all the Stocks are not taking place in the market during the Intraday Trading. So they have selected 30 important companies to derive the Index figures. This method was adopted in the year 1987. We offer you below few companies which were taken. RIL, Infosys, ITC, ICICI Bank, BHEL, L&T, HUL, HDFC, ONGC, Bharti Airtel and so on. Sensex Index figures are nothing but the average numbers of thirty stocks.


In the same way NIFTY is calculated with 50 companies. Moreover, the stock which is in the Sensex can be also listed in the NIFTY.


In the month of December 2006, NIFTY and SENSEX was flying in the sky like rocket and it has gained its maximum numbers. But the same indexes were crawling in the bottom during the month of OCT. 2005. At this point of time, FED RATE was raised by America and that made us to panic because FOREIGN INSTITUITIONAL INVESTORS (FII) may ouster from Indian Markets. Not only that, Crude oil Price has gone high and also Inflation was too much worldwide. You will happen to hear only lullaby wherever you turn.

All these factors have joined its hands together and pulled down SENSEX by 800 points and many of the investors lost huge money. In view of this Investors were freightened . But just after a month ie Nov. 2005, the total scenario have changed and it has once again started flying in the sky to 9000 points. FIIs are the only giants made it happened.

Let us discuss about FIIs and who are they in the next segment please.