Understanding What is Nifty: Whenever traders or investors discuss how the market performed for that day, they frequently use two terms, either ‘Nifty’ or ‘Sensex’. These both are market barometers that are used to judge market performance. In this article, we are going to discuss what is nifty and its implications. Keep Reading!
What is Nifty?
The Nifty or NIFTY 50 is the benchmark index of the National Stock Exchange (NSE) for the Indian stock market. Nifty is owned and managed by NSE Indices Limited (formerly known as India Index Services and Products (IISL)), along with the portfolio of 67 indices under the NIFTY brand as of September 30, 2016.
Just as Sensex was introduced by the Bombay stock exchange(BSE) in 1978-79, similarly Nifty is a major stock index in India introduced by the National Stock Exchange(NSE). Nifty 50 constitutes of the top 50 companies selected from the National stock exchange (NSE) based on the free-float market capitalization. Here are a few of the top characteristics of the Nifty 50:
- 50 top stocks are selected from diversified sectors.
- The base year is taken as 1995 and the base value is set to 1000.
- Nifty is calculated on 50 stocks actively traded in the NSE
Starting at 1,000 points in 1995, Nifty 50 has currently crossed 16,500 points as of August 2021.
Further, looking into the importance of NIFTY 50, it can be used for a variety of purposes such as benchmarking fund portfolios, tracking marketing returns, launching index funds, ETFs, and structured products, etc.
If Nifty goes up, it means that the market (as overall) is doing good and the shares of the top 50 companies in Nifty are going higher. On the other hand, if the Nifty goes down, it means that the market is not doing good and the shares of the top 50 nifty companies are going lower.
NIFTY 50 Stock List
| Name | Industry | Weight | |
|---|---|---|---|
| 1. | Reliance Industries Ltd. | Energy - Oil & Gas | 10.56% |
| 2. | HDFC Bank Ltd. | Banking | 8.87% |
| 3. | Infosys Ltd. | Information Technology | 8.62% |
| 5. | ICICI Bank Ltd. | Banking | 6.72% |
| 4. | Housing Development Finance Corporation Ltd. | Financial Services | 6.55% |
| 6. | Tata Consultancy Services Ltd. | Information Technology | 4.96% |
| 7. | Kotak Mahindra Bank Ltd. | Banking | 3.91% |
| 10. | Larsen & Toubro Ltd. | Construction | 2.89% |
| 8. | Hindustan Unilever Ltd. | Consumer Goods | 2.81% |
| 11. | ITC Ltd. | Consumer Goods | 2.63% |
| 13. | Bajaj Finance Ltd. | Financial Services | 2.52% |
| 12. | State Bank of India | Banking | 2.40% |
| 14. | Bharti Airtel Ltd. | Telecommunication | 2.33% |
| 9. | AXIS Bank Ltd. | Banking | 2.29% |
| 14. | Asian Paints Ltd. | Consumer Goods | 1.92% |
| 16. | HCL Technologies Ltd. | Information Technology | 1.68% |
| 23. | Bajaj Finserv Ltd. | Financial Services | 1.41% |
| 24. | Titan Company Ltd. | Consumer Goods | 1.35% |
| 25. | Tech Mahindra Ltd. | Information Technology | 1.30% |
| 17. | Maruti Suzuki India Ltd. | Automobile | 1.28% |
| 19. | Wipro Ltd. | Information Technology | 1.28% |
| 20. | UltraTech Cement Ltd. | Cement | 1.17% |
| 18. | Tata Steel Ltd. | Metals | 1.14% |
| 30. | Tata Motors Ltd. | Automobile | 1.12% |
| 22. | Sun Pharmaceutical Industries Ltd. | Pharmaceuticals | 1.10% |
| 21. | Mahindra & Mahindra Ltd. | Automobile | 1.09% |
| 31. | Power Grid Corporation of India Ltd. | Energy - Power | 0.96% |
| 28. | Nestle India Ltd. | Consumer Goods | 0.93% |
| 32. | Grasim Industries Ltd. | Cement | 0.86% |
| 33. | HDFC Life Insurance Co. Ltd. | Insurance | 0.86% |
| 34. | Divi’s Laboratories Ltd. | Pharmaceuticals | 0.84% |
| 36. | Hindalco Industries Ltd. | Metals | 0.82% |
| 26. | JSW Steel Ltd. | Metals | 0.82% |
| 35. | NTPC Ltd. | Energy - Power | 0.82% |
| 27. | Dr. Reddy’s Laboratories Ltd. | Pharmaceuticals | 0.77% |
| 29. | IndusInd Bank Ltd. | Banking | 0.72% |
| 44. | Oil & Natural Gas Corporation Ltd. | Energy - Oil & Gas | 0.70% |
| 41. | SBI Life Insurance Co. | Insurance | 0.69% |
| 38. | Adani Port and Special Economic Zone | Infrastructure | 0.68% |
| 39. | Cipla Ltd. | Pharmaceuticals | 0.67% |
| 40. | Tata Consumer products Ltd. | Consumer Goods | 0.63% |
| 37. | Bajaj Auto Ltd. | Automobile | 0.57% |
| 45. | Britannia Industries Ltd. | Consumer Goods | 0.57% |
| 42. | UPL Ltd. | Chemicals | 0.51% |
| 43. | Bharat Petroleum Corp. Ltd. | Energy - Oil & Gas | 0.48% |
| 48. | Shree Cement Ltd. | Cement | 0.47% |
| 47. | Eicher Motors Ltd. | Automobile | 0.45% |
| 49. | Coal India Ltd. | Mining | 0.43% |
| 46. | Hero MotoCorp Ltd. | Automobile | 0.43% |
| 50. | Indian Oil Corporation Ltd. | Energy - Oil & Gas | 0.41% |
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Nifty 50 Details and Fact Sheet
- No of Constituents: 50
- Methodology – FREE Float Market Capitalization
- Launch Date: April 22, 1996
- Base Year: November 02, 1995
- Base Value: 1000
- Calculatin Frequency: Real Time
- Index Rebalancing: Half-Anually
Quick Note: Most index providers rebalance their indexes regularly, adding or removing stocks or changing the weights of existing index constituents. Nifty 50 typically rebalances on a half-annual basis, to re-pick the top 50 stocks from NSE at the time of rebalancing.
You can find the factsheet of Nifty 50 here!
Also Read: How to open your demat and trading account at Angel Broking?
Closing Thoughts
In this article, we looked into what is Nifty and explained the constituents of Nifty 50. Looking into Nifty is a popular method to track the performance of the market that is used by Indian traders and Investors. Though Nifty 50 started quite late compared to the ‘Sensex” launch date, still it is more widely used among the trading community in India.
That’s all for this post on understanding what is Nifty. We hope this article was useful to you. Do comment below if you have got any questions regarding Nifty 50 meaning. Have a great day and Happy Investing!
Kritesh (Tweet here) is the Founder & CEO of Trade Brains & FinGrad. He is an NSE Certified Equity Fundamental Analyst with +7 Years of Experience in Share Market Investing. Kritesh frequently writes about Share Market Investing and IPOs and publishes his personal insights on the market.
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What should I do for investment . I know nothing about it
Do the Nifty 50 companies changes time to time with market or are they standard?
Yes, they change. Last September’17, Bajaj Finance, HPCL, UPL were included in the Nifty50 index and ACC, Bob, Tata Power were excluded. Read more here.
INCLLUSION AND EXCLUSION OF NIFTY 50 INDEX SINCE FROM 2007 TO 2017 IS AVAILABLE WHERE DO I GET IT
Is this the update Nifty 50 list?