What is Nifty? and how is it different from Sensex?

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What is Nifty?  This question comes in the mind of every person who reads a little bit about the stock market. If a news paper comes to you, then Nifty is definitely mentioned in that too. Sometimes there comes such a storm in Nifty and Sensex that all the media start showing news about Nifty and Sensex on their channel.

Well, what common people like us know about it, probably nothing, whenever I see news about Nifty and Sensex in any news or newspaper, then the question definitely comes that what is Nifty, what is Sensex?

Friends, today we will tell your question in detail, however today in this article I will give you information about Nifty. Also, I will give information about what is the difference between Nifty and Sensex, so read this article till the end so that all your questions will be answered. Let’s know about Nifty.

What is Nifty (NIFTY)

Nifty is a market index. Which was created by the National Stock Exchange on 21 April 1996. The full form of Nifty is national stock exchange fifty. It is made by combining two words National and Fifty, hence it is also known as national fifty. Nifty shows the equity shares of top 50 companies out of 1600 stocks listed on the National Stock Exchange. That’s why many people also know it by Nifty 50.

NIFTY 50 is the first most prominent stock index among the two national indices of India. Wherein India’s second most important national indices are Sensex. Sensex is one of the indices of Bombay Stock Exchange. Nifty is owned by India Index Services and Products (IISL), but is itself a subsidiary of National Stock Exchange Strategic Investment Corporation Limited.

The shares of all 50 companies of Nifty are associated in 12 different sectors of the Indian economy. These include – consumer goods, entertainment and media, information technology, financial services, metals, energy, cement sectors, automobiles, pesticides and fertilizers, pharmaceuticals, telecommunications, and other services.

Nifty follows the trend of blue chip companies. Here blue chip means high liquid and largest Indian securities.

Trading in the future derivative market was started by NSE on 12 June 2000 and futures contracts are based on Nifty 50. June 4, 2001 Another derivative market was introduced by NSE which is known as options market.

How are companies listed in Nifty Index?

To get listed in the Nifty Index, a company has to qualify the following points –

1. To be listed in Nifty, the company must be domicile of India.
2 . The company should be registered with the National Stock Exchange.
3. The stock of the company should be of high liquidity, as measured by the average impact cost.
4. The trading frequency of the company must be 100% for the last six months.
5. The company is required to have an average free floating market capitalization.
6. Shares with DVR (Differential Voting Rights) should be eligible for the index.

How is Nifty calculated?

Nifty 50 is calculated on the basis of the weighted value of 50 free-float market capitalization shares listed on the NSE. Index value is calculated using free float market capitalisation. Also shows the relative share prices from the base period. To calculate the market value, the product of the share and the market price per share is worked out.

Index value = Sum of free float market capitalization / (Base Market Capital * Base Index Value)

What is Market Capital?

Market capital refers to the total value of the company. To calculate the market capital, the current share price of the company and all the shares of the company is taken as the multiple.
For example, suppose in the year 2015, ABC company issued its 10000 equity shares in the market. Today the market price per share of ABC company is Rs 200. so his

Market Capital = Total no. of Shares issued by a Company × Current Price of each Share

Share Capital of ABC Company –
= 10000*200
= ₹2000000

What is Free Flot Market Capitalization?

In Free Flot Market Capitalisation, the company’s shares are calculated excluding the shares held by the promoter. This means that the shares left by the promoter by taking out all the shares are called free float market capitalization. That is, those shares which are with the investors, traders.

For example a company has issued 5 lakh shares, but out of these 2.1 lakh shares are owned by the promoter, then the free float market capitalization is Rs 1.9 lakh.

Benefits of NIFTY

Some of the major advantages of Nifty are mentioned below-

1. With Nifty 50, we get to know about whether the stock market is bullish or bearish at once. Bullish means if Nifty is going up. That is, buying is increasing in the market and selling is decreasing. Bearish means if Nifty is going down. That is, sales are increasing in the market and purchases are decreasing. Nifty can easily predict the movement of the stock market.

2. It is known whether the market is accurate or not. Accumulate means that the market is neither bullish nor bearish.

3. Nifty includes shares of 12 sectors of the country’s economy. Information about the economy of the country can be obtained from it. If there is a boom in the market then the economy of the country is also going up but if there is a slowdown in the market then the economy of the country is also going down. If Nifty is Accumulating then the economy of the country is also Accumulating.

4. Nifty Trend gives the investor and trader accurate data of bullish and bearish in the market.

5. Due to the rise in Nifty, foreign investment in it increases and the market cap of the companies also strengthens. Foreign investment also strengthens our economy.

What is the difference between Nifty and Sensex?

1. The full form of Nifty is National and Fifty. Whereas the full form of Sensex is Sensitive and Index.

2. Nifty NSE’s subsidiary Index and Services and Products Limited (IISL)
is managed by. Sensex is owned by Bombay Stock Exchange.

3. Base 1000 is taken to calculate Nifty. Base 100 is taken to calculate the Sensex.

4. The base period 1995 is taken to calculate Nifty. The base period 1978-1979 is taken to calculate the Sensex.

5. Nifty comprises of top 50 companies which actively trade on NSE. Sensex comprises of top 30 companies which actively trade on BSE.

6. Nifty 50 trades on the basis of foreign exchange on Singapore Stock Exchange (SGX) and Chicago Mercantile Exchange (SME). Sensex trades on the basis of EUREX and Stock exchanges of BRCS nations foreign exchange.

Companies Listed in Nifty 50 – List Of Nifty 50 Companies

Friends, let us now give you the list of companies listed in Nifty 50. After the name of the company, which company is associated with any sector, I will also tell you the name of –

ADANIPORTS Adani Ports and Special Economic Zone Ltd. SERVICES
ASIANPAINT Asian Paints Ltd. CONSUMER GOODS
AXISBANK Axis Bank Ltd. FINANCIAL SERVICES
BAJAJ-AUTO Bajaj Auto Ltd. AUTOMOBILE
BAJFINANCE Bajaj Finance Ltd. FINANCIAL SERVICES
BAJAJFINSV Bajaj Finserv Ltd. FINANCIAL SERVICES
BPCL Bharat Petroleum Corporation Ltd. ENERGY
INFRATEL Bharti Infratel Ltd. TELECOM
CIPLA Cipla Ltd. PHARMA
COALINDIA Coal India Ltd. METALS
DRREDDY Dr. Reddy’s Laboratories Ltd. PHARMA
EICHERMOT Eicher Motors Ltd. AUTOMOBILE
GAIL GAIL (India) Ltd. ENERGY
GRASIM Grasim Industries Ltd. CEMENT & CEMENT PRODUCTS
HCLTECH HCL Technologies Ltd. IT
HDFCBANK HDFC Bank Ltd. FINANCIAL SERVICES
HEROMOTOCO Hero MotoCorp Ltd. AUTOMOBILE
HINDALCO Hindalco Industries Ltd. METALS
HINDPETRO Hindustan Petroleum Corporation Ltd. ENERGY
HINDUNILVR Hindustan Unilever Ltd. CONSUMER GOODS
HDFC Housing Development Finance Corporation Ltd. FINANCIAL SERVICES
ITC ITC Ltd. CONSUMER GOODS
ICICIBANK ICICI Bank Ltd. FINANCIAL SERVICES
IBULHSGFIN Indiabulls Housing Finance Ltd. FINANCIAL SERVICES
IOC Indian Oil Corporation Ltd. ENERGY
INDUSINDBK IndusInd Bank Ltd. FINANCIAL SERVICES
INFY Infosys Ltd. IT
KOTAKBANK Kotak Mahindra Bank Ltd. FINANCIAL SERVICES
LT Larsen & Toubro Ltd. CONSTRUCTION
LUPIN Lupin Ltd. PHARMA
M&M Mahindra & Mahindra Ltd. AUTOMOBILE
MARUTI Maruti Suzuki India Ltd. AUTOMOBILE
NTPC NTPC Ltd. ENERGY
ONGC Oil & Natural Gas Corporation Ltd. ENERGY
POWERGRID Power Grid Corporation of India Ltd. ENERGY
RELIANCE Reliance Industries Ltd. ENERGY
SBIN State Bank of India FINANCIAL SERVICES
SUNPHARMA Sun Pharmaceutical Industries Ltd. PHARMA
TCS Tata Consultancy Services Ltd. IT
TATAMOTORS Tata Motors Ltd. AUTOMOBILE
TATASTEEL METALS
TECHM Tech Mahindra Ltd. IT
TITAN Titan Company Ltd. CONSUMER GOODS
UPL UPL Ltd. FERTILISERS & PESTICIDES
ULTRACEMCO UltraTech Cement Ltd. CEMENT & CEMENT PRODUCTS
VEDL Vedanta Ltd. METALS
WIPRO Wipro Ltd. IT
YESBANK Yes Bank Ltd. FINANCIAL SERVICES
ZEEL Zee Entertainment Enterprises Ltd. MEDIA & ENTERTAINMENT

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