What is NIFTY and how it is calculated?
What is NIFTY?
The NIFTY (National stock Exchange FIFTY) is an indicator which indicates the performance of the 50 major companies listed on NSE (National Stock Exchange). It is also called Nifty Fifty or NIFTY 50. In a simple word, we can say if NIFTY goes up then the prices of the top traded stocks of major companies listed on the NSE will go up and on the contrary, when NIFTY goes down then the prices of the top traded stocks of major companies listed on the NSE will go down.
The Nifty is also known as CNX Nifty which stands for CRISIL NSE Index. The CNX Nifty covers 22 sectors of the Indian economy is owned and managed by India Index Services and Products (IISL), which is fully owned subsidiary of the National Stock Exchange Strategic Investment Corporation Limited. The base year of NIFTY is 1995 with a base value of 1000.
How NIFTY is calculated?
The Nifty is calculated by compiling the current prices of 50 listed companies on NSE (National Stock Exchange) and this calculating method is known as “free-float market capitalisation” method. Before June 26, 2009, the Nifty was calculated on “full market capitalisation” method. During the market opened session, the trading computer automatically calculates the NIFTY in every fifteen seconds considering the prices of the Index scripts at which trades are executed and updated regularly on all trading workstations connected to the NSE trading computers in real time.