Nifty 50
Full form: National Stock Exchange Fifty
The Nifty 50 is the main stock market index of the National Stock Exchange of India. It follows the prices of 50 large, actively traded companies from different sectors, and it is the number most often quoted when people say how the Indian market is doing.
What an index is
An index is a single number that summarises the movement of a group of shares. The Nifty 50 is calculated by NSE Indices Limited. When it rises, the shares in it have risen overall, weighted by their size. It is a measure, not a price you pay, so you cannot buy the Nifty directly.
How companies are chosen and weighted
The 50 companies come from the largest and most actively traded listed companies and from sectors such as banking, information technology, energy and consumer goods. Each company's weight depends on its free-float market cap, so larger companies move the index more. The list is reviewed regularly and can change.
How people invest in it
Index funds and ETFs that copy the Nifty 50 let you own a small share of all 50 companies in one purchase. Traders also use Nifty futures and options, which are contracts based on the index.
Nifty and Sensex
The Sensex is the BSE's equivalent and follows 30 companies. The two usually move in the same direction because both follow India's largest companies. Other Nifty indices exist too, such as Nifty Bank and Nifty Next 50, each following a different group.
Reading an index move (hypothetical numbers)
Suppose the Nifty 50 closes at 24,000 one day and at 24,240 the next. It rose by 240 points, which is 1%.
That tells you the 50 companies moved up by about 1% overall that day. It does not mean every one of them rose.
Common questions
- What is the Nifty?
- The NSE's main index, a number that tracks 50 large listed companies.
- What is the full form of Nifty?
- National Stock Exchange Fifty.
- Is the Nifty the same as the NSE?
- No. The NSE is the exchange, the marketplace. The Nifty 50 is an index calculated from 50 companies listed on it.
- What is the difference between Nifty and Sensex?
- The Nifty 50 follows 50 companies on the NSE. The Sensex follows 30 companies on the BSE. They are two measures of the same broad market.
- Can I buy the Nifty directly?
- No, but you can buy an index fund or an ETF that follows it.