Before knowing about bank nifty first we will learn about what is nifty? Nifty or Nifty 50 is an index of National stock exchange or NSE this index is a broad-based stock market index for the Indian equity market the full abbreviation of nifty is a national stock exchange fifty which includes the weighted average of fifty Indian company stocks and this is one of the two major indices second being BSE Sensex.
Nifty is managed and owned by Indian index services and products which is also owned by NSE strategic investment corporation limited this index Nifty 50 was launched on 1st April 1996 and is one of the many stock indices of nifty this index covers twelve sectors of the Indian economy and offers index managers an exposure to the market in one portfolio some of the companies listed in this index are Aditya Birla capital, Bank of Baroda, Dabur, havells, icici etc.
Bank Nifty represents the twelve large most liquid capitalized stocks from the banking sector which are trading in the national stock exchange this index provides traders and market intermediaries a platform where they can see the performance of the Indian banking sector bank nifty is volatile so there is a better scope to trade in this one.
Traders prefer trading in this segment because it gives some profit even in the volatile market any trader should trade carefully in bank nifty because the pe ratio of bank nifty gives a sharp increase which occurs suddenly in a short period of time.
Bank Nifty trading is helpful for the traders who do not want to invest directly into company shares and where there is a larger risk of losing capital.