Nifty

What is the Nifty and how does it count

Nifty is the index of National Stock Exchange. this post is about what is the Nifty and how it counts.

What is the Nifty and how does it count ?

Nifty is the index of 50 major stocks listed on the National Stock Exchange. Nifty is made up of two words, NATIONAL and FIFTY . From this, it appears that the Nifty word is based on the top fifty stocks listed on the National Stock Exchange. The nifty moves make you aware of the movement of market.

 

If the Nifty is fast, you can assume that the market is also fast. If the Nifty is declining, then you can assume that the market is also declining. Although the Nifty is counted only on the price of fifty shares, the direction of the Nifty also indicates the direction of the market.

Consider Reading : Exchange traded Fund And its impact on Stock Market.

We have told you in our previous post about Sensex . that what the Sensex is and how it counts. Because the Sensex is based on 30 shares and the Nifty is based on 50 shares.

then we can say that the Nifty represents market’s move in a broader way. This fifty shares have been taken from 22 different industries.

Like the Sensex , the free float market on the Nifty National Stock Exchange. the free-float market-weighted stock market index.

Market capitalization of any company .

Consider Reading : What is Sensex and How it is Calculated ?

The part of Market Capitalization which can be available in the market for sale, it will be free float market capitalization and on the basis of which the Nifty is also calculated. This index of fifty stocks is called Nifty.

How this indices calculated in the free float market-weighted stock market index?

You can see the complete method of calculation on Sensex. The base of the Nifty is 1995 and base digit is 1000. This index is calculated from November 3, 1995 and on this day the index base of 1000 is assumed.

Today, if the price of Nifty is close to 8000, then it means that the price of Nifty shares has increased by up to 800% till 1995.

It was my attempt to explain Nifty in simple language. Hopefully you understand what the Nifty is and what is the significance of this.