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-75.6(-0.13%)
Stock name
Price/ change
AU SMALL FINANCE BANK LTD
+0.9 (+0.11%)
AXIS BANK LIMITED
+4.6 (+0.39%)
BANDHAN BANK LIMITED
+1.42 (+0.81%)
BANK OF BARODA
+1.79 (+0.75%)
FEDERAL BANK LTD
-0.42 (-0.2%)
HDFC BANK LTD
+3.3 (+0.16%)
ICICI BANK LTD.
-10.4 (-0.72%)
IDFC FIRST BANK LIMITED
-0.39 (-0.5%)
INDUSIND BANK LIMITED
+0.1 (+0.01%)
KOTAK MAHINDRA BANK LTD
-4.8 (-0.22%)
PUNJAB NATIONAL BANK
-0.15 (-0.13%)
STATE BANK OF INDIA
-1.25 (-0.15%)
Nifty Bank, also known as Bank Nifty, is an index that represents India's most liquid and large-cap banking stocks. It serves as a benchmark for the banking sector's performance, offering valuable insights into market trends and economic conditions. Comprising major public and private sector banks, the index reflects investor sentiment and sectoral movements. Traders and investors closely monitor Nifty Bank for its impact on financial markets, as it influences derivative trading and investment strategies. Its movements are shaped by factors such as monetary policy, interest rates, and banking sector developments, making it a crucial indicator of India's financial landscape.
Nifty Bank, also known as Bank Nifty, is an index that represents India's most liquid and large-cap banking stocks. It serves as a benchmark for the banking sector's performance, offering valuable insights into market trends and economic conditions. Comprising major public and private sector banks, the index reflects investor sentiment and sectoral movements. Traders and investors closely monitor Nifty Bank for its impact on financial markets, as it influences derivative trading and investment strategies. Its movements are shaped by factors such as monetary policy, interest rates, and banking sector developments, making it a crucial indicator of India's financial landscape.
Definition of Nifty Bank Index
The Nifty Bank index is a sectoral benchmark on the National Stock Exchange (NSE) that tracks the performance of large and liquid banking stocks. It consists of up to 12 stocks, including public, private, and other banks. Launched on 15 September 2003, with a base year of 2000 and a base value of 1000, it is reconstituted semi-annually to reflect market changes. No stock exceeds 33%, and the top three cannot surpass 62% collectively. With a 17.6% CAGR (2000–2021), it has outperformed Nifty 50 in six of 10 years (2011–21). Governed by NSE Indices Limited, it also has a total returns variant for ETFs and funds.
Definition of Nifty Bank Index
The Nifty Bank index is a sectoral benchmark on the National Stock Exchange (NSE) that tracks the performance of large and liquid banking stocks. It consists of up to 12 stocks, including public, private, and other banks. Launched on 15 September 2003, with a base year of 2000 and a base value of 1000, it is reconstituted semi-annually to reflect market changes. No stock exceeds 33%, and the top three cannot surpass 62% collectively. With a 17.6% CAGR (2000–2021), it has outperformed Nifty 50 in six of 10 years (2011–21). Governed by NSE Indices Limited, it also has a total returns variant for ETFs and funds.
Nifty Bank Index Value Calculation
The Nifty Bank index is calculated based on the free-float market capitalisation of its 12 constituent stocks. Free float represents shares available for public trading, excluding promoter holdings. The index value is determined using:
Index Value = (Current Index Free Float Market Capitalisation / Base Free Float Market Capitalisation) * Base Index Value
Here, Index Free Float Market Capitalisation = Current shares outstanding * IWF * Capping factor * Price. The index undergoes a semi-annual review using data from January 31st and July 31st, with stock replacements, if needed, implemented on the last trading day of March and September.
Nifty Bank Index Value Calculation
The Nifty Bank index is calculated based on the free-float market capitalisation of its 12 constituent stocks. Free float represents shares available for public trading, excluding promoter holdings. The index value is determined using:
Index Value = (Current Index Free Float Market Capitalisation / Base Free Float Market Capitalisation) * Base Index Value
Here, Index Free Float Market Capitalisation = Current shares outstanding * IWF * Capping factor * Price. The index undergoes a semi-annual review using data from January 31st and July 31st, with stock replacements, if needed, implemented on the last trading day of March and September.
Selection of Stocks for Nifty Bank
To qualify for inclusion in the Nifty Bank index, stocks must meet these criteria:
Be part of the Nifty 500.
The index must have at least 10 stocks; if fewer, the shortfall is filled from the top 800 stocks based on turnover and market capitalisation over six months.
Belong to the banking sector.
Have a 90% trading frequency in the past six months.
Be listed for at least six months.
Be tradeable in the F&O segment.
IPOs can be included if they meet these criteria for three months.
No single stock can exceed 33%, and the top three must stay within 62% at rebalancing.
Companies are ranked by free-float market capitalisation, requiring at least 1.5x the smallest constituent's free float.
Selection of Stocks for Nifty Bank
To qualify for inclusion in the Nifty Bank index, stocks must meet these criteria:
Be part of the Nifty 500.
The index must have at least 10 stocks; if fewer, the shortfall is filled from the top 800 stocks based on turnover and market capitalisation over six months.
Belong to the banking sector.
Have a 90% trading frequency in the past six months.
Be listed for at least six months.
Be tradeable in the F&O segment.
IPOs can be included if they meet these criteria for three months.
No single stock can exceed 33%, and the top three must stay within 62% at rebalancing.
Companies are ranked by free-float market capitalisation, requiring at least 1.5x the smallest constituent's free float.
You can invest in the Nifty Bank through the following methods:
ETFs and index funds: Invest in an exchange-traded fund (ETF) or an index fund that mirrors Nifty Bank by holding the same stocks in similar proportions, allowing you to benefit from index growth.
Futures and options: Trade derivatives like futures and options with Nifty Bank as the underlying asset, where returns depend on index movements.
Direct stock investment: Buy the individual stocks in the same proportion as in Nifty Bank, replicating its portfolio to gain exposure to the index’s performance.
You can invest in the Nifty Bank through the following methods:
ETFs and index funds: Invest in an exchange-traded fund (ETF) or an index fund that mirrors Nifty Bank by holding the same stocks in similar proportions, allowing you to benefit from index growth.
Futures and options: Trade derivatives like futures and options with Nifty Bank as the underlying asset, where returns depend on index movements.
Direct stock investment: Buy the individual stocks in the same proportion as in Nifty Bank, replicating its portfolio to gain exposure to the index’s performance.
Here are the key benefits of investing in Nifty Bank:
Exposure to top banking stocks: Nifty Bank comprises some of India’s leading banking stocks, and the index has delivered strong performance over time. Investing in these stocks can contribute to long-term wealth growth.
High liquidity in derivatives: Futures and options linked to Nifty Bank have high trading volumes, ensuring better liquidity. This makes it easier to enter or exit positions, reducing risk in F&O trading by allowing smooth contract execution.
Here are the key benefits of investing in Nifty Bank:
Exposure to top banking stocks: Nifty Bank comprises some of India’s leading banking stocks, and the index has delivered strong performance over time. Investing in these stocks can contribute to long-term wealth growth.
High liquidity in derivatives: Futures and options linked to Nifty Bank have high trading volumes, ensuring better liquidity. This makes it easier to enter or exit positions, reducing risk in F&O trading by allowing smooth contract execution.
Yes, you can buy Bank Nifty today and sell it tomorrow, but the method depends on how you invest. If you buy Bank Nifty through futures or options, you can hold and sell them the next day. However, if you trade Bank Nifty intraday (MIS orders), positions must be squared off the same day. If you invest via an ETF or index fund, you can sell it the next day, subject to brokerage and settlement rules.
Bank Nifty, or the Nifty Bank index, consists of a maximum of 12 banking stocks. These include leading public and private sector banks that meet specific eligibility criteria, such as high liquidity, trading frequency, and market capitalisation. The index composition is reviewed semi-annually to ensure it reflects the evolving banking sector.
The Nifty Bank Index was launched on 15 September 2003. Its base year is set to 2000, with a base value of 1000. The index was introduced to track the performance of India’s top banking stocks and has since become a key benchmark for the banking sector.
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