![]() ![]() This provides key insight into not only ‘what is NIFTY 50’, but also into exactly why the benchmark index is, well, a benchmark index for the Indian markets. The benchmark index is made up of stocks belonging to 13 of the country’s sectors in order to achieve diversification. ![]() While the NIFTY 50 is now a much relied upon barometer for how the Indian stock markets are performing at large, it has been meticulously constructed over time in order to achieve this status. If the price of the index falls, this means the stocks in the basket of securities are not performing well, which means the market at large is likely not doing too well either. This weighs the average performance of all these companies, giving out one singular number, or the price of the index. For instance (and purely as an example), if you wanted to measure market performance for the fintech sector, you would create a basket of stocks made up of the most well known and well-established fintech companies. This representational sample then works as a barometer to test market performance. In its simplest terms, an index is a basket of securities that is created as a representational sample of a certain sector in the markets. What is an index?īefore we move on to further exploring what NIFTY 50 and what are NIFTY 50 stocks are, we must first understand what exactly an index or a benchmark index is. If it isn’t, most likely it will soon make its way down there. If the NIFTY 50 is in the red, chances are the market is too. From companies such as Asian Paints and a slew of HDFC and Tata companies (Titan for instance), the benchmark index is considered by investors to be one of the most accurate litmus tests for the Indian stock markets. The NIFTY 50 index is made up of 50 stocks that are prominent figures in the Indian stock market. ![]() Nowadays, when someone asks “what is NIFTY 50” or “What are NIFTY 50”, they are referred to this benchmark index for the NSE. They found this in the form of the new NIFTY 50. When the NSE was set up in Mumbai in 1992, its managing team needed a strong pole to lodge in the financial ground to solidify their place in the dematerialized markets space. While there were attempts to put it back together after the crash, these were less than a resounding success. However, as much as the stocks rallied, the harder they were brought down during the 2008 crash. Considered pillars of the economy, with strong fundamentals to show, these stocks only attracted “buy” recommendations. NIFTY Fifty in previous decades was the name given to large-cap stocks in the US markets of the 1950s and 1960s, stocks that were considered blue-chip and a ‘buy only’ stock. However, this name is not the first time the name “NIFTY” has seen action on the stock market. The Original NIFTY50Īt the risk of skipping ahead, NIFTY50 is the name given to the benchmark index listed on the National Stock Exchange (NSE) of India. Arguably, NIFTY50 stands to be the most popular one of the lot and taking a look at its constituents, you are likely to recognise most of the stocks it consists of.īut what is NIFTY 50, how does it function, and what exactly is a benchmark index? In fact, what is an index? We all will answer all these questions in this article. ![]() Some of these benchmarks include the SENSEX, NIFTY50, NIFT100, NIFTY200 and so on and so forth. Alternatively, once the initial ‘fear of the unknown state’ wore off from the country’s atmosphere, the markets began to rally, with multiple benchmarks reached untapped highs, and companies using this stock market gold rush to file for a flurry of IPOs, from Zomato, Aditya Birla Sunlife AMC, and most recently, the highly coveted Paras Defence and space technologies limited. First, many were astonished at how despite the economic peril that was brought about by the world being brought to a standstill, the stock markets as a whole, especially in India were in comparison, not affected much. The stock market has occupied prominent space in the news over the last year and a half, for a number of reasons. ![]()
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