Stock Price Index

A stock price index is a composite measure that tracks the aggregate performance of a selected group of stocks representing a market or a market segment. In India, the Nifty 50 and S&P BSE Sensex are the two most widely followed stock price indices, serving as benchmarks for large-cap equity performance. Indices are constructed using different methodologies—free-float market capitalisation weighting is the most common in India—and are periodically rebalanced to reflect changes in the market. They form the basis for index mutual funds, ETFs, derivatives contracts, and performance benchmarking across the investment management industry.