Investing in stock market involves quite a lot of risk. The share market is pretty sensitive and gets affected at the call of any calamity that occurs at any place across the globe. The nature of calamity may vary from being political, religious, financial or social. It is, thus, important to understand the nature of stocks that you are investing in. You should be choosy about your stocks and your investment decision should be very practical. To understand the stock market better it is very important that you know what is Nifty index and what role does it play in the functioning of the stock market. Here is all the information that you may need while you try to get answer to the question- what is NIFTY index. Go through it to enhance your stock market knowledge and make your investments more profitable:
What is Nifty? – Basic Understanding:
NIFTY is the leading index in the Indian Stock Market that keeps the record of the large companies on the National Stock Exchange. NIFTY is also known as S&P CNX Nifty, Standard & Poor’s CRISIL NSE Index or simply NIFTY 50. NIFTY represents 50 stocks that belong to 23 different economical sectors. NIFTY may be used for different purposes such as index funds, index based derivatives and benchmarking fund portfolios. The India Index Services and Products Ltd. Owns and manages NIFTY index.
NIFTY has emerged as the only financial product in India which has the largest ecosystem. This ecosystem comprises of onshore and offshore exchange traded funds, exchange-traded futures and options that are linked to NSE in India and CME and SGX abroad, offshore OTC derivatives and other index funds.
NIFTY index is free floating market that is weighed on capitalization. From the day NIFTY index was introduced, it used capitalization as weight, assigning it to different constituents of the share market. As of June 26 2009, NIFTY index has been calculated in accordance to the free float methodology. If the weight of the constituents of the index is to be calculated, as of November 2010, one third of the weight is occupied by top four scrips- ICICI Bank, Infosys Technologies, Larsen & Turbo and Reliance Industries. Likewise, the half weight of the index is accounted by top 8 scrips.
Companies Included in Nifty:
Now that you have the basic idea of what is nifty, it is time to know about the companies that are featured in NIFTY index. The NIFTY index features 50 companies. These are:
- Wipro Ltd
- Unitech Ltd
- Tata Steel Limited
- Tata Power Co Ltd
- Tata Motors Limited
- Tata Consultancy Services Limited
- Suzlon Energy Limited
- Sun Pharmaceuticals Ind.
- Sterlite Industries ( India ) Limited
- Steel Authority Of India Ltd
- State Bank Of India
- Siemens Ltd
- Reliance Power Limited
- Reliance Power Limited
- Reliance Infrastructure Limited
- Reliance Industries Ltd
- Reliance Communications Limited
- Reliance Capital Ltd
- Ranbaxy Labs Ltd
- Punjab National Bank
- Power Grid Corporation of India Limited
- Oil & Natural Gas Corpn Ltd
- Ntpc Ltd
- Maruti Suzuki India Ltd.
- Mahindra And Mahindra Ltd
- Larsen And Toubro Ltd.
- Jindal Steel And Power Ltd
- Jaiprakash Associates Ltd
- ITC Limited
- Infrastructure Development Finance Company Limited
- Idea Cellular Limited
- Icici Bank Ltd.
- Hindustan Unilever Ltd.
- Hindalco Industries Ltd.
- Hdfc Ltd
- Hdfc Bank Ltd
- Hcl Technologies Ltd
- Grasim Industries Ltd
- Gail (india) Ltd
- Dlf Limited
- Cipla Ltd
- Cairn India Limited
- Bharti Airtel Limited
- Bharat Petroleum Corp Ltd
- Bharat Heavy Electricals Ltd
- Axis Bank Limited
- Ambuja Cements Ltd
- Acc Limited
- Abb Ltd
What is Nifty Index Chart and how is it Calculated?
As you have already learnt about what is NIFTY, it is time to know about what is NIFTY index chart. Nifty index chart is a graphical representation of the activities of the NIFTY index constituents in the stock market. The chart displays the following things: high point, low point, open amount and close amount.
The NIFTY index is calculated based on the market capitalization weighted method. In this method, the total market value of all the stocks in the NIFTY index is reflected in the level of index in relation to a particular base period. November 3 1995 is the base period decided for S&P CNX Nifty. This date also marks the completion of one year of NSE’s Capital Market Segment’s operation. The base value that has been set for the index is 1000 and the base capital is Rs. 2.06 trillion.