Nifty 50

Nifty 50 is the benchmark stock market index of the National Stock Exchange (NSE) of India, representing the performance of the top 50 companies across various sectors. It is a market capitalisation-weighted index, meaning companies with larger market values have a greater influence on the index's movement. Nifty 50 is widely used by investors to gauge market trends, make investment decisions, and track economic performance. It includes companies from industries such as banking, IT, energy, and FMCG. The index is rebalanced semi-annually to reflect market changes and maintain its relevance.

The NIFTY 50, formerly called CNX NIFTY, is India's leading stock index on the National Stock Exchange (NSE), representing the equities market's performance. It stands for ‘National Stock Exchange Fifty’ and consists of 50 blue-chip companies across various sectors. This float-adjusted, market-capitalisation-weighted index is computed in INR, AUD, USD, and CAD. Reconstituted semi-annually, up to five companies may be added or removed yearly to maintain market relevance. Variants include NIFTY 50 USD, NIFTY 50 Total Returns Index, and NIFTY 50 Dividend Points Index. As of 30th September 2022, it represented 62% of NSE’s float-adjusted market capitalisation.

The NIFTY 50 share price is derived from the weighted average of 50 stocks based on free-float market capitalisation, which includes shares available for public trading, excluding promoter holdings. Stocks are selected from the NIFTY 100 and must meet specific criteria: they must be Indian companies listed on NSE, highly liquid with an average impact cost of ≤0.50% for ₹10 crore transactions, have 100% trading frequency in the last six months, a free-float market capitalisation 1.5 times greater than the smallest index constituent, and available derivative contracts. Companies issuing shares with Differential Voting Rights are also eligible.

The NIFTY 50 index value is calculated using the formula:

Index value = Current Market Value / (Base Market Capital × Base Index Value).

The calculation factors in corporate actions like mergers, de-listings, restructurings, and spin-offs. The index undergoes a semi-annual review based on six months of data ending in January and July. Any stock replacements in the NIFTY 50 are implemented on the last trading day of March and September to ensure alignment with market dynamics.