What is Nifty
The word NIFTY originates from 2 words, `National' and 'Fifty'.
NIFTY basically means the index of the 50 most actively traded stocks from across all sectors. NIFTY represents the top stocks of the NSE and when we talk about NIFTY going up, it means that all the heavyweight stocks of NSE across all sectors are moving up.
Most of the stock trading in the country is done through NSE and BSE. There are other stock exchanges as well, like the Calcutta stock exchange, but they are not that popular.
NIFTY consists of top 50 companies from 24 different sectors. NIFTY is computed from the performance of top stocks from different sectors.
Some mutual funds use NIFTY as a benchmark. The performance of the mutual funds is assessed against the performance of the NIFTY. On NSE, Futures and Options are available for trading with the NIFTY as an underlying index.
NIFTY is calculated by using the market capitalization weighted method according to which weights are assigned according to the size of the company. Larger the size, larger the weightage.
4 main factors are to be taken into account when calculating the NIFTY.
- The base year is taken as 1995
- The base value is set to 1000
- NIFTY is based on 50 actively traded stocks of the NSE.
- 50 top stocks from selected from 24 sectors
The following link will give a fair idea about the Nifty Forecast (Nifty Levels) on a daily basis to understand the market movements : https://www.dynamiclevels.com/en/nifty/nifty-forecast