- SENSEX (Sensitive Index):
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- Represents the Bombay Stock Exchange (BSE).
- It is a market index comprising 30 of the largest and most actively traded stocks on the BSE.
- Serves as an indicator of the overall performance and health of the Indian stock market.
- NIFTY (National Stock Exchange Fifty):
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- Represents the National Stock Exchange (NSE).
- Consists of 50 of the most liquid and large-cap stocks across various sectors.
- Provides insight into the broader market trends and is widely used as a benchmark for mutual funds and index-based investments.
Regulation:
- The Securities and Exchange Board of India (SEBI) regulates the stock market under the Securities Contracts (Regulation) Act (SCRA), empowered to recognize and oversee exchanges.
Key Regulatory Laws:
- SEBI Act, 1992: Establishes SEBI’s role in protecting investors, promoting market development, and regulating securities.
- SCRA, 1956: Governs securities contracts, including the listing and trading of securities and the regulation of brokers.
- Companies Act, 2013: Outlines rules for company incorporation, management, and securities issuance.
- Depositories Act, 1996: Regulates depositories, allowing for dematerialization and electronic transfer of securities.
- Insider Trading Regulations, 2015: Prohibits insider trading, detailing conduct codes, disclosure procedures, and penalties.
The SENSEX and NIFTY, governed by regulatory bodies like the Securities and Exchange Board of India (SEBI), offer a reliable reflection of India’s economic pulse. Through the regulations outlined in laws such as the SEBI Act, 1992 and the Securities Contracts (Regulation) Act, the stock markets are ensured to operate with integrity, transparency, and protection for investors. Together, these indices and regulatory frameworks form the backbone of India’s dynamic financial market.
