The stock market is divided into two major exchanges: the NSE and the BSE, each of which has its own set of Sectoral Indices. Why do we need Sectoral Indices when broad market indices like the Sensex and Nifty already exist? To learn more about this topic, watch this Laxmi Bhai video.
Sectoral indices provide brief summaries and comparative data for specific industries or sectors. It allows investors to compare the performance of a stock to that of specific industries. Each trading company operates in a specific economic sector, and businesses that offer similar products or services will be grouped together. Investors can conduct in-depth analyses of the economy as a whole by classifying firms and the economy. Sector indexes include energy, services, healthcare, consumer goods, industrial, materials, utilities, technology and communications, and finance.
The NIFTY 50 index covers 13 sectors of the Indian economy (as of 30 April 2021) and provides investment managers with exposure to the Indian market in a single portfolio.