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Nifty index : What is it and how to use it ?

Nifty index

NIFTY INDEX: What is it and how to use it?

Nifty Index or Nifty 50 index is the benchmark of the stock market index for Indian equity market. It is owned and managed by India Index Services and Products or IISL which is a wholly owned subsidiary of NSE strategic investment corporation limited. Nifty Index with a base index of 1000 and base capital of Rs 2.6 trillion is the largest financial product in India.

Nifty stocks include the stock from various portfolios like banking, manufacturing, pharmaceuticals, energy and telecommunications. The Navratna companies of the Indian government take their place in all portfolios along with private companies like Mahindra & Mahindra, Bajaj Auto, Larsen & Tubro, Reliance Industries, Maruti Suzuki Pvt Ltd, Hindalco, Hero Motors, Tata motors in manufacturing. The financial portfolio has companies like ICIC, Axis Bank, Housing development finance corporation, State bank of India, HDFC bank and Yes bank to name a few. Dr Reddy’s laboratories, Lupin and Cipla are the major players from the pharmaceutical portfolio. The Nifty index is calculated on the stocks of these 50 companies comprising of Nifty 50.

The Nifty index captures the behaviour of the overall equity market and this is possible through Nifty stocks that provide traders and brokers’ real time data and analytics related to the stocks being traded. The current price, rise and fall in price through the day, percentage increase and decrease of the price, all data is provided on the screen to everyone interested in trading, making it easier for the brokers, traders and investors to take a fast and informed decision.

In India, Nifty is the benchmark index for NSE and Sensex is the benchmark index for BSE i.e Bombay Stock Exchange. Unlike NSE that was set up in 1992, BSE was established in 1875 making it Asia’s first stock exchange and world's fastest stock exchange with a median trade speed of 6 microseconds. BSE is the 11th largest stock exchange that has a market capitalisation of $ 1.7 trillion with 5500 publicly listed companies. BSE Sensex index was developed in 1950 that provided a means to measure the overall performance of the exchange. BSE and NSE together form the backbone of Indian stock market.