4 Reasons for Significance of Indices

Performance Measurement

Indices like BSE Sensex and NSE Nifty in India show how the whole stock market is doing. They help investors see if the market is strong or weak.

Market Sentiment

Indices mirror market sentiment. Rising means confidence, falling suggests caution. Investors watch them to adjust their positions.

Portfolio Diversification

Investors can diversify using ETFs or mutual funds that mimic an index. This spreads risk across many stocks, safeguarding portfolios from market ups and downs.

Investment Strategy

Indices offer insights for smart investing. Study index components, find investment chances, and allocate capital to growth areas.