The Nifty 50 is a diversified 50 of the blue chip largest and liquid Indian companies listed on the National Stock Exchange, accounting for 13 sectors of the economy.
Nifty 50 Index has an inception date of November 3, 1995. The index was constructed using a unique concept of impact cost, which helps in the selection of highly liquid stocks and results in the creation of a replicable index.
The NIFTY 50 index is a free float market capitalisation weighted index. The index was initially calculated on a full market capitalisation methodology. On 26 June 2009, the computation was changed to a free-float methodology.
It is used for a purpose such as benchmarking fund portfolios, index-based derivatives and index funds.
NIFTY 50 is owned and managed by NSE Indices Limited. NSE Indices is India’s specialised company focused upon the index as a core product.
Derivatives
Trading in call and put options on the Nifty 50 are offered by the NSE. The exchange offers weekly as well as monthly expiry.
Nifty Next 50
NIFTY Next 50, also called NIFTY Junior, is an index of 50 companies whose free float market capitalisation comes after that of the companies in NIFTY 50. NIFTY Next 50 constituents are thus potential candidates for future inclusion in NIFTY 50.
Do you Know
- There are 12 companies who are part of Nifty 50 since inception.
- Across 25 years, there have been 101 inclusions in Nifty 50, averaging 4 per year.
- There are 7 ETFs based on Nifty 50 listed internationally having AUM of USD 1.07 Bn.
- Derivatives on Nifty 50 index are traded on 3 exchanges globally.
The flagship ‘NIFTY 50’ index is widely tracked and traded as the benchmark for Indian Capital Markets.