WHAT IS STOCK MARKET?

A share market commonly referred as stock market is a place where trading of shares takes place. Most of the trading in India takes place at

 BSE(Bombay stock exchange)

 

and NSE(national stock exchange). 

These two have their indices(indicators) namely Sensex and Nifty.

Sensex consist of top 30 companies similarly Nifty consists of top 50 companies .
They are calculated through free float market capitalization methodology. Sounds weird ? Lets us see first of all what do we need to know.

What is market cap? 

market cap = no. of share issued * price of one share
free float market cap = no. of share issued ( excluding promoter holdings ) * price of one share 

now let us take an example 
consider two companies A and B listed in sensex 
they have a collective free float market capitalization of X.
suppose sensex had a market cap of Y in 1979(base year).
then Sensex value  = X * 100/Y