Let's look at how Rahul keeps a check of the movement of the market.
It would have been a very confusing and messy task if he checked each and every company to figure out if they are up or down.
There are almost 5000 companies in the Bombay Stock Exchange and approx 2000 companies listed in National Stock Exchange.
Therefore, to solve this problem there are two main indices in India. These are:
- S&P BSE Sensex representing Bombay Stock Exchange -- Nifty representing National Stock Exchange
Thus he need not track every company to get an idea of how the market is moving. Instead he keeps a check of the important companies that are pre-selected and monitored. These pre-selected stocks are known as 'Market Index'.