What is NIFTY 50

NIFTY 50

The NIFTY 50 index is National Stock Exchange of India's benchmark broad based stock market index for the Indian equity market. It represents the weighted average of 50 Indian company stocks in 12 sectors and is one of the two main stock indices used in India, the other being the BSE sensex.


Nifty is owned and managed by India Index Services and Products (IISL), which is a wholly owned subsidiary of the NSE Strategic Investment Corporation Limited. IISL had a marketing and licensing agreement with Standard & Poor's for co-branding equity indices until 2013. The Nifty 50 was launched 1st April 1996, and is one of the many stock indices of Nifty.

NIFTY 50 Index has shaped up as a largest single financial product in India, with an ecosystem comprising: exchange traded funds (onshore and offshore), exchange-traded futures and options (at NSE in India and at SGX and CME abroad), other index funds and OTC derivatives (mostly offshore). NIFTY 50 is the world’s most actively traded contract. WFE, IOMA and FIA surveys endorse NSE’s leadership position.

The NIFTY 50 covers 12 sectors (as on Oct 7, 2017) of the Indian economy and offers investment managers exposure to the Indian market in one portfolio. During 2008-12, NIFTY 50  Index share of NSE market capitalisation fell from 65% to 29% due to the rise of sectoral indices like NIFTY Bank, NIFTY IT, NIFTY Pharma, NIFTY SERV SECTOR, NIFTY Next 50, etc. 

The NIFTY 50 index is a free float market capitalisation weighted index. The index was initially calculated on full market capitalisation methodology. From June 26, 2009, the computation was changed to free float methodology. The base period for the CNX Nifty index is November 3, 1995, which marked the completion of one year of operations of National Stock Exchange Equity Market Segment. The base value of the index has been set at 1000 and a base capital of Rs 2.06 trillion.

Sector Representation:

 

 

 

  

 

Top constituents by weightage:

 

 

 

 

 

 

Index Methodology:

Eligibility Criteria for Selection of Constituent Stocks 

• Market impact cost is the best measure of the liquidity of a stock. It accurately reflects the costs faced when actually trading an index. For a stock to qualify for possible inclusion into the NIFTY50, have traded at an average impact cost of 0.50% or less during thelast six months for 90% of the observations, for the basket size of Rs. 100 Million.
• The company should have a listing history of 6 months.
• Companies that are allowed to trade in F&O segment are only eligible to be constituent of the index
• A company which comes out with an IPO will be eligible for inclusion in the index, if it fulfills the normal eligibility criteria for the index for a 3 month period instead of a 6 month period.

Index Re-Balancing:

Index is re-balanced on semi-annual basis. The cut-off date is January 31 and July 31 of each year, i.e. For semi-annual review of indices, average data for six months ending the cut-off date is considered. Four weeks prior notice is given to market from the date of change.

Index Governance:

A professional team at IISL manages NIFTY 50 Index. There is a three-tier governance structure comprising the Board of Directors of IISL, the Index Policy Committee and the Index Maintenance Sub-Committee.

Major falls:

Following are some of the notable single-day falls of the NIFTY 50 Index -

All Time High: All time intraday high was 11,171.50 on January 29, 2018 All Time Closing High was 11,130.40 on January 29, 2018   Disclaimer: All information contained herewith is provided for reference purpose only.All information has taken from Wikipedia  and www.nseindia.com. Also Please make sure you have understated the stock market risk before investment.