The Nifty meaning is a derivation from the mix of two words, i.e. “National Stock Exchange” and “fifty”. It is an abbreviation of the National Stock Exchange Fifty. It is a collection of top performing 50 equity stocks that are actively trading in the index. However, 51 stocks are currently trading on Nifty. Hence, Nifty is also known as Nifty50 or CNX Nifty.
Nifty is a popular stock index. The National Stock Exchange of India introduced it. This index was founded in 1992 and started trading in 1994. It is owned and managed by India Index Service & Products Limited (IISL). IISL is an Indian specialized company which focuses on an index as its focus product. It has a variety of financial products like index funds, index futures and options, stock futures and options, etc.
A stock index is a measurement of the changes that take place in the stock market. It measures price movement and market performance. For creating an index, one has to group some stocks from the list of stocks with similar characteristics. This grouping of stocks can be on the type of industry, total market capitalization or the size of the company.
To calculate the value of the stock market index, one can use the values of the underlying group of stocks. Any change in the value of underlying stock also leads to a change in the stock index value. If the price of most of the stocks rises, the index will again rise and vice-versa.
Thus, an index is indicative of changes in the market. It reflects the overall market investing sentiment and price movements. Investors and financial managers use this to measure the value of portfolio holding. They can also use it for comparing the performance with the benchmark index.
|Automotive||Engineering||Metals & Mining|
|Banking/Finance||Food & Beverage||Oil & Gas|
|Consumer durables & non-durables||Media||Telecom|
It follows the patterns and trends of blue-chip companies. These are the largest companies with high liquidity in India. Nifty also contains several sub-indices based on separate asset classes, sectors, or segments. They are NIFTY IT, NIFTY Next 50, NIFTY Bank, NIFTY Small Cap, and many more. Also, Nifty has 1600 companies listed in it.
NIFTY 50 is a benchmark index by NSE. It is one of the two national indices and a broad-based index of the National Stock Exchange NSE. Also, NSE is a leading stock exchange in India. It is the largest trading platform in India. Another national index is Sensex which is a product of the Bombay Stock Exchange BSE.
For the latest stock performance, the Nifty index reconstitution happens every six months. It checks the 6-month performance of the stocks. It also checks if the companies fulfill the eligibility criteria. Following these criteria, it eliminates or adds stocks in the stock list, respectively. In case of any elimination or addition, the respective company is given a notice four weeks prior to reconstitution.
The NSE indices have an excellent team of professionals that manage the Nifty index. It is an advisory committee that offers guidance and expertise on issues that relate to equity indices.
Apart from the periodical routine, the index also goes through a reconstitution when the company undergoes certain events—for instance, company events like spin-offs, mergers or acquisitions, suspensions or compulsory delisting. Additionally, Nifty conducts quarterly screening of the companies to keep track of whether they are adhering to regulations.
The companies must also adhere to specific mandates given by the Securities and Exchange Board of India (SEBI). Otherwise, the companies may be delisted from the indices.
Nifty 50 indices calculation uses the float-adjusted and market capitalization method. Here, the level index demonstrates the aggregate market value of the stocks present in it for a specific duration. This particular base duration for the Nifty index is 3rd November 1995. The base value of stocks is 1000, and the base capital is Rs.2.06 trillion
Market capitalization = Price * Equity Capital
Free Float Market Capitalization = Price * Equity Capital * Investable Weight Factor
Index value = Current market value / (1000 * Base market capital)
Investable Weight Factor (IWF) is a factor to determine the number of shares available for trading. The index calculation is on a real-time basis as the value of stock also changes daily.
The formula calculates not only the value but also the changes in the corporate procedures. For instance, changes in corporate can be stock splits, rights issues, and many more. Nifty share market is a benchmark for measurement against all equity shares markets in India. It regularly conducts index maintenance checks. Therefore, this ensures that it is stable and working effectively. This can persist as a benchmark index of the Indian stock market.
Nifty and Sensex both are Indian stock market indices which depict the strength of the securities markets. Despite their similarity to the broad-based index, there is a difference between Sensex and Nifty.
As such, there is no significant difference between Sensex and Nifty. They both target the large cap stocks. Nifty is broader than Sensex as it has more number of large cap stocks listed. Also, Nifty has a more diversified portfolio in comparison to Sensex. One can even notice more trading happening on the NSE India platform.
|1. Tata Motors Limited||26. Tata Consultancy Services Ltd.|
|2. Hindalco Industries Ltd.||27. Britannia Industries Ltd.|
|3. Larsen & Toubro Ltd.||28. Bharat Petroleum Corporation Ltd.|
|4. Titan Company Ltd.||29. Bajaj Finserv Ltd.|
|5. Bharti Infratel Ltd.||30. Cipla Ltd.|
|6. Adani Ports and Special Economic Zone Ltd.||31. Reliance Industries Ltd.|
|7. Hero MotoCorp Ltd.||32. Bajaj Auto Ltd.|
|8. HCL Technologies Ltd.||33. Dr Reddys Laboratories Ltd.|
|9. Ultratech Cement Ltd.||34. Tata Steel Ltd.|
|10. Indian Oil Corporation Ltd.||35. IndusInd Bank Ltd.|
|11. Grasim Industries Ltd.||36. Nestle India Ltd.|
|12. Tech Mahindra Ltd.||37. Infosys Ltd.|
|13. JSW Steel Ltd.||38. HDFC Bank Ltd.|
|14. Oil & Natural Gas Corporation Ltd.||39. Shree Cement Ltd.|
|15. Zee Entertainment Enterprises Ltd.||40. Mahindra & Mahindra Ltd.|
|16. UPL Ltd.||41. Housing Development Finance Corporation Ltd.|
|17. Power Grid Corporation Of India Ltd.||42. GAIL (India) Ltd.|
|18. Asian Paints Ltd.||43. Axis Bank Ltd.|
|19. ICICI Bank Ltd.||44. State Bank Of India|
|20. Wipro Ltd.||45. ITC Ltd.|
|21. Hindustan Unilever Ltd.||46. HDFC Life Insurance Co Ltd.|
|22. Coal India Ltd.||47. NTPC Ltd.|
|23. Kotak Mahindra Bank Ltd.||48. Eicher Motors Ltd.|
|24. Bajaj Finance Ltd.||49. Sun Pharmaceutical Industries Ltd.|
|25. Maruti Suzuki India Ltd.||50. Bharti Airtel Ltd.|
Usually, the equity market timings are from 9:15 am to 03:30 pm, Monday to Friday. However, the commodity market is between 10:00 AM to 11:30 PM, Monday to Friday.
Taxation on mutual funds is a complex topic. Taxes paid on your mutual fund investments vastly depend on factors such as what kind of funds you have invested in, the duration of your investment, which income tax slab you belong to and so on.