NIFTY 50

Nifty, also known as the Nifty 50, is the stock market index for the National Stock Exchange of India (NSE). It represents the performance of the 50 largest and most actively traded stocks listed on the NSE. The Nifty is one of the two main benchmark indices in India, the other being the BSE Sensex, which represents the Bombay Stock Exchange.

The Nifty is a diversified index, covering various sectors of the Indian economy, such as finance, technology, energy, healthcare, and consumer goods. The index is market capitalization-weighted, meaning that the weight of each stock in the index is determined by its market capitalization (the total value of its outstanding shares).

The Nifty is calculated using a free-float market capitalization methodology, which means only the shares available for trading (excluding promoter shares and other locked-in shares) are considered for calculating the index. This methodology aims to provide a more accurate representation of the overall market performance.

The Nifty index is widely followed by investors, traders, and financial institutions as a gauge of the overall health and direction of the Indian stock market. It serves as a reference point for various investment products like index funds, exchange-traded funds (ETFs), and derivatives contracts like Nifty futures and options.

As the Nifty comprises 50 of the largest and most liquid companies in India, it provides a broad perspective on the country's equity market and is often used as a benchmark to evaluate the performance of mutual funds and other investment portfolios. Changes in the Nifty index composition are periodically made based on predefined criteria to ensure the representation remains relevant and up-to-date.