What is NIFTY ?

The NIFTY 50 index National Stock Exchange of India's benchmark broad based stock market index for the Indian equity market. Full form of NIFTY is National Stock Exchange Fifty. It represents the weighted average of 50 Indian company stocks, these 50 companies are among the largest companies in India in 13 sectors.

Nifty is the reference index which is referred to by the investors on a daily basis. The direction of Nifty represents the trend of the market and most stocks tend to move in its direction.

It is among the two most common benchmark index in India, namely – Sensex and Nifty. The movements in Nifty happen as a result of the movement in these 50 stocks.

Components and Weightage

NIFTY 50 stocks belong 13 different sectors. The below details shows the weightage of different sectors in Nifty:

  1. Financial services(banks, insurance and NBFCs) form a large chunk (35%) of NIFTY.
  2. IT (15%)
  3. Energy (16%)
  4. Consumer goods (11%)
  5. Automobile, Construction, Pharma, Cement, Telecom, Services, Media and Fertilizers (23%).

Some heavyweight stocks like Reliance, HDFC Bank, ITC, TCS, Infosys, etc have higher weightagein Nifty index. The top 10 stocks alone contribute to almost 60% to the index. A positive movement in few of these big stocks can take NIFTY up and vice versa. The list is dynamic and keeps changing basis the movement of stocks. Some existing stocks can be replaced by new stocks or the weightage of certain stocks might change with time.