How Many Index in Indian Stock Market: A Complete Guide for Beginners

If you’ve ever watched the news and heard phrases like “Nifty 50 fell by 100 points” or “Sensex hit a record high,” you’ve already brushed against one of the most crucial concepts in investing — the stock market index. But what exactly does that mean? And more importantly, how many index are there in the Indian stock market?

Let’s take a simple, conversational journey through this fascinating topic and understand how these indexes shape the Indian financial world.

Discover what is index in stock market, how many index in Indian stock market, major Indian stock market index, and best trading app in India.

Introduction to Stock Market Index

Imagine you walk into a grocery store to buy fruits. There are hundreds of varieties — apples, bananas, mangoes, oranges, and more. To know whether fruits in general are becoming expensive or cheap, you can’t check every fruit. Instead, you might look at the price of a few representative ones — say, apples and bananas.

That’s exactly how a stock market index works — it acts as a barometer for the entire market by tracking a selected set of stocks.

What Is an Index in Stock Market?

So, what is index in stock market?

In simple terms, an index is a collection of selected stocks that represent a specific segment of the market. It shows how that segment is performing — whether it's rising, falling, or stable.

For example:

• The Nifty 50 represents the top 50 companies listed on the National Stock Exchange (NSE).
  
  

• The Sensex tracks 30 large companies listed on the Bombay Stock Exchange (BSE).
  
  

In short, an index is like a mirror — it reflects the overall performance of the market or a specific sector.

Why Do We Need a Stock Market Index?

A stock market index helps investors and analysts:

• Measure market performance easily.
  
  

• Compare returns of different time periods.
  
  

• Evaluate portfolio performance against a benchmark.
  
  

• Track sectoral trends, like banking or IT.
  
  

Without indexes, understanding the entire market would be like reading a thousand-page novel just to know how it ends!

How Does a Stock Market Index Work?

Each index is built using a group of stocks that share something in common — market capitalization, industry, or theme.

Every stock in the index has a weightage, often based on its market capitalization (the company’s total value in the stock market).

When these stock prices move up or down, the overall index value changes. For example:

• If Reliance Industries’ share price rises, it can lift the Nifty 50 because Reliance has a large weight in it.
  
  

• Similarly, if Infosys or HDFC Bank falls, it can pull the index down.
  
  

How Many Index in Indian Stock Market?

Now, let’s tackle the main question — how many index in Indian stock market?

As of now, India has more than 100 stock market indexes, covering different categories such as:

• Benchmark indexes
  
  

• Sectoral indexes
  
  

• Thematic indexes
  
  

• Broad market indexes
  
  

• Strategy-based indexes
  
  

Both BSE and NSE maintain their own sets of indexes, catering to investors with varied interests and strategies.

Major Indian Stock Market Indexes

The two major exchanges in India are:

1. Bombay Stock Exchange (BSE)
   
   

2. National Stock Exchange (NSE)
   
   

Each has flagship indexes that serve as benchmarks for market performance.

Let’s explore these in detail.

NSE (National Stock Exchange) Indexes

The NSE is India’s largest stock exchange by trading volume and market capitalization. Its indexes are widely followed by investors and fund managers.

Popular NSE Indexes:

• Nifty 50 – Tracks the top 50 companies across 13 sectors.
  
  

• Nifty Next 50 – Represents companies ranked 51–100 by market cap.
  
  

• Nifty 100 – Combines Nifty 50 and Nifty Next 50.
  
  

• Nifty Midcap 150 – Tracks mid-sized companies.
  
  

• Nifty Smallcap 250 – Represents smaller companies.
  
  

• Nifty Bank – Covers leading banking sector stocks.
  
  

• Nifty IT – Focuses on top technology firms.
  
  

• Nifty FMCG, Nifty Auto, Nifty Pharma, etc., cover specific industries.
  
  

The Nifty 50, in particular, is considered the heart of the Indian stock market index system.

BSE (Bombay Stock Exchange) Indexes

The BSE, established in 1875, is Asia’s oldest stock exchange. Its indexes are equally significant.

Popular BSE Indexes:

• Sensex (S&P BSE Sensex) – Tracks 30 of the largest and most actively traded stocks.
  
  

• BSE 100, BSE 200, and BSE 500 – Represent broader market segments.
  
  

• BSE MidCap and BSE SmallCap – Focus on medium and small-sized firms.
  
  

• BSE Sectoral Indexes – Cover industries like banking, energy, telecom, healthcare, and more.
  
  

The Sensex is often called the “Pulse of the Indian Economy.”

Sectoral Indexes in India

Sectoral indexes track the performance of a specific industry. These are perfect for investors who focus on one area.

Examples include:

• Nifty Bank
  
  

• Nifty IT
  
  

• Nifty Metal
  
  

• Nifty Realty
  
  

• BSE Healthcare
  
  

• BSE Oil & Gas
  
  

Such indexes help investors identify which sectors are leading or lagging.

Thematic and Strategy-Based Indexes

These indexes group companies based on an idea or strategy rather than a specific industry.

Examples:

• Nifty Infrastructure Index – Companies related to infrastructure development.
  
  

• Nifty Dividend Opportunities 50 – Focuses on high-dividend-paying firms.
  
  

• Nifty 100 ESG Index – Tracks environmentally and socially responsible companies.
  
  

These indexes are like “theme playlists” for investors — tailored for specific investment tastes.

How Are Indexes Calculated?

Most Indian indexes use the free-float market capitalization method.

Here’s how it works:

1. Multiply each company’s share price by its market capitalization.
   
   

2. Adjust it for free-float shares (shares available for public trading).
   
   

3. Divide by an index divisor to maintain consistency over time.
   
   

This ensures that larger, more valuable companies influence the index more.

Difference Between Price-Weighted and Market-Cap Weighted Indexes

In India, almost all major indexes use the market-cap weighted system.

Why Do Investors Follow Indexes Closely?

Indexes are not just numbers — they are signals.

They help investors:

• Gauge market trends.
  
  

• Predict economic health.
  
  

• Benchmark mutual funds or portfolios.
  
  

• Identify growth sectors.
  
  

For instance, if the Nifty IT index is soaring, it indicates confidence in the tech sector.

How Can You Trade or Invest Using Indexes?

There are several ways to use indexes in trading and investing:

1. Index Funds:
   These are mutual funds that replicate an index like Nifty 50. Ideal for long-term investors.
   
   

2. Exchange-Traded Funds (ETFs):
   Traded on the exchange just like stocks, ETFs also track indexes.
   
   

3. Index Futures and Options:
   For advanced traders, these derivatives allow speculation or hedging on index movements.
   
   

Best Trading App in India for Index Trading

If you’re inspired to start trading or investing in indexes, choosing the best trading app in India is crucial.

Top apps offering seamless index trading include:

• Firstock – Known for fast order execution, low brokerage, and intuitive charts.
  
  

• Zerodha Kite – User-friendly and ideal for beginners.
  
  

• Groww – Great for mutual funds and ETFs.
  
  

• Upstox – Offers advanced charting tools.
  
  

A reliable trading app in India helps you track multiple indexes, trade efficiently, and manage portfolios with ease.

The Role of Index Funds and ETFs

Index funds and ETFs have made investing simpler for everyone.

They:

• Mirror market performance.
  
  

• Charge lower fees than actively managed funds.
  
  

• Offer diversification with minimal effort.
  
  

Think of them as “ready-made baskets” of top companies — convenient, efficient, and effective.

Future of Stock Market Indexes in India

India’s economy is evolving, and so are its indexes.

With the rise of ESG investing, sectoral diversification, and digital platforms, expect more specialized indexes in the coming years.
For example:

• Nifty EV (Electric Vehicle) Index may soon track companies in the EV space.
  
  

• Fintech and Green Energy Indexes are also gaining traction.
  
  

Indexes will continue to be the compass guiding investors in an increasingly complex market.

Conclusion

So, how many index in Indian stock market? More than a hundred — and growing!

From the iconic Sensex and Nifty 50 to niche thematic indexes, each plays a vital role in mapping India’s economic pulse.

Whether you’re an investor, a trader, or just curious about finance, understanding these indexes helps you read the heartbeat of the market with confidence.

With the right trading app in India, tracking and investing in these indexes has never been easier.

FAQs

1. What is index in stock market?

A stock market index is a collection of selected stocks that represents the overall performance of a specific segment or the entire market.

2. How many index in Indian stock market?

India has over 100 stock market indexes, including benchmark, sectoral, thematic, and strategy-based indexes.

3. What are the main Indian stock market index?

The Nifty 50 (NSE) and Sensex (BSE) are the two most important and widely tracked Indian stock market indexes.

4. Can I trade directly in a stock market index?

You can’t buy an index directly, but you can invest in index funds, ETFs, or trade index futures and options.

5. Which is the best trading app in India for index trading?

Firstock, Zerodha, Upstox, and Groww are among the best trading apps in India, offering reliable and fast access to index trading.