You must have also come across research reports from brokerage houses that talk of buying, selling and holding of a company's share.
Let us go through a few of these terms used in routine stock market parlance.
It is an index that represents the direction of the companies that are traded on the Bombay Stock Exchange [ Images ], BSE. The word Sensex comes from sensitive index.
The Sensex captures the increase or decrease in prices of stocks of companies that it comprises. A number represents this movement. Currently, all the 30 stocks that make up the Sensex have reached a value of 14,355 points.
These companies represent the myriad sectors of the Indian economy. A few of these companies and the sector they represent are: ACC (cement), Bajaj Auto [ Get Quote ], Tata Motors [ Get Quote ], Maruti [ Get Quote ] (automobile), Infosys [ Get Quote ], Wipro [ Get Quote ], TCS [ Get Quote ] (information technology), ONGC [ Get Quote ], Reliance [ Get Quote ] (oil & gas), ITC, HLL [ Get Quote ] (fast moving consumer goods) etc.
* List of 30 Sensex stocks
Each company has a weight assigned to it. Companies like Reliance, Infosys, and HLL have higher weightages compared to others like HDFC [ Get Quote ], Wipro, or a BHEL.
* Weights assigned to Sensex stocks
The increase or decrease in this index, the Sensex, is the effect of a corresponding increase or decrease in the stock market price of these 30 companies.
It is the Sensex's counterpart on the National Stock Exchnage, NSE.
The only difference between the two indices (the Sensex and Nifty) is that the Nifty comprises of 50 companies and hence is more broad-based than the Sensex.
Having said that one must remember that the Sensex is the benchmark that represents Indian equity markets globally.
The Nifty 50 or the S&P CNX Nifty as the index is officially called has all the 30 Sensex stocks.
* List of Nifty 50 stocks
The NSE Nifty functions exactly like (explained above) the BSE Sensex.
A particular kind of investor who purchases shares in the expectation that the market price of that company's share will increase.
S/he sells her/his stock at a higher price and pockets the profit. Simply put, the bulls buy at a lower price and sell at a higher price.