Nifty 50

Nifty 50 is an Indian stock market index made of 50 stocks representing the top companies in 13 sectors with a specific weightage assigned to each stock and sector. These stocks belong to a diverse range of sectors within the Indian economy, including Information Technology (IT), financial services, consumer goods, entertainment and media, metals, pharmaceuticals, telecommunications, cement and allied products, automobiles, pesticides and fertilisers, energy, and various other sectors. The Nifty 50 plays a crucial role in guiding investment decisions and is frequently used as a benchmark to gauge the performance of Indian stock markets as a whole

Below are the stocks included in Nifty 50 with their sectors:

The value of NIFTY 50 is calculated using a float-adjusted and market capitalization-weighted methodology. In this approach, the index level reflects the total market value of stocks included in the index during a specific base period. Below is the formula for calculating the Nifty 50 index value:

Index Value = Current Market Value / Base Market Capital x 1000

The index calculation methodology also considers adjustments for corporate actions, including rights issues, stock splits, and other relevant factors.

The table below depicts the weightage of the top 10 stocks in Nifty 50 (as of January 2024):

Yes. You can trade in Nifty 50 through derivatives i.e. Futures and Options (F&O). The prices of these F&O contracts are linked to the value of the Nifty 50 index. The lot size for Nifty 50 for F&O trading is 50 and in multiples thereof.

Nifty 50 comprises 50 top representative stocks from 13 sectors listed on the National Stock Exchange (NSE). Below are the eligibility criteria for stocks to be included in Nifty 50:

• The company must be of Indian origin and registered with the NSE
• The stock must possess high liquidity
• It must have a trading frequency of 100% during the last six months
• Nifty 50 index undergoes a periodic review every six months to remove stocks which do not meet the above criteria from the index and introduce new stocks. 

The closing price of the Nifty 50 is calculated based on the weighted average market prices of the constituent stocks for the last 30 minutes before market closing, i.e., between 3 PM and 3:30 PM.

The Nifty 50 index depicts the performance of the top 50 stocks listed on the National Stock Exchange (NSE). Hence, you cannot buy or sell Nifty 50 units directly. Nevertheless, you can trade in Nifty 50 derivatives, such as Futures and Options (F&O). Alternatively, you can consider investing in index mutual funds, which are structured to replicate the performance of Nifty 50.

These indices are designed to be a representation of the performance of the stock market as a whole. They’re usually made up of companies across different sectors and industries. Some of the Broad Market NIFTY indices include - NIFTY 50, NIFTY Next 50, NIFTY 100, NIFTY Midcap 50 and NIFTY 500.