Abstract: The stock market plays an important role in economic development by facilitating capital formation and providing investment opportunities. Stock market indices serve as key indicators of overall market performance. In India, benchmark indices such as the Nifty 50 and BSE Sensex are widely used to evaluate trends and movements in the equity market. These indices represent leading large-cap companies listed on the National Stock Exchange and the Bombay Stock Exchange and are considered major barometers of the Indian stock market. This study aims to evaluate and compare the performance of Nifty 50 and Sensex by examining their risk–return characteristics. The study is based on secondary data collected from the official databases of NSE and BSE. Daily closing price data for the period 1 January 2021 to 31 December 2025 were used for the analysis. Statistical tools such as mean return, standard deviation, coefficient of variation, and correlation analysis were applied to assess the performance and volatility of the indices. The results indicate that Nifty 50 recorded slightly higher mean returns compared to Sensex during the study period. The standard deviation results show that both indices exhibit similar levels of volatility, although Sensex experienced marginally higher fluctuations. The coefficient of variation suggests that Nifty 50 provides better risk–return efficiency. In addition, correlation analysis reveals a very strong positive relationship between the two indices, indicating that they move closely together. Overall, the findings suggest that both indices effectively represent the performance of the Indian equity market.

Keywords: Nifty 50, BSE Sensex, Risk–Return Analysis, Volatility, Indian Stock Market.

Downloads: | DOI: 10.17148/IARJSET.2026.13393