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 |