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Both Nifty & Sensex are ‘Indices’ (plural of Index), they represent a group of top companies averaged out in a single number. If the Sensex is up, you can say that on average, most stocks are gaining and the opposite is true if the Index falls.
There are two main exchanges in India – The National Stock Exchange (NSE) & The Bombay Stock Exchange (BSE).
The Nifty is an index from the NSE, it has 50 stocks in the index. An easy way to remember this is ‘Nifty Fifty’ – Yes it rhymes.
The Sensex, short for the sensitivity Index is from the BSE and comprises of 30 stocks.
Summary : Nifty is weighted average of 50 top stocks from 24 sectors
An index is simply an average of a group of select stocks, Nifty is a weighted average of 50 stocks, meaning some stocks hold more “value” than other stocks. For example ITC has more weight than Lupin.
The Dow jones is a popular index in USA, The FTSE (pronounced footsie) is a popular index in UK. Similarly in India the most popular Indices are the Nifty and Sensex, however there are many more indices representing other areas of the market. For example there is a midcap Index, an IT index, an Auto Index and even a small cap index.
The nifty started with a base of 1000 in the year 1995, it uses weightage to contribute points to the index. For example ITC is given a higher weightage than most stocks so a movement of 5% in ITC contributes 40 points in Nifty and a 5% move in IDFC contributes 3 points on Nifty (calculation based on June 2014 prices).
The market value of a stock is called the market capitalisation, that is total number of shares multiplied by stock price. Can you make a wild guess?
At the time of writing this the following companies (part of the Nifty Index) have the highest market capitalisation in India.*All prices in Crores as mentioned.
Tata Consultancy – 4,17,955 crores
Reliance Industries – 3,49,056 crores
ONGC – 3,39,877 crores
ITC – 2,67,638 crores
Coal India – 2,35,000 crores
Sixteen Lakh Crores, a large majority of us cannot fathom such unimaginable values, but that is market capitalisation shared by Tata Consultancy, Reliance Industries and ONGC, ITC and Coal India.
S.No. Company Name
01 ACC Limited
02 Ambuja Cements Ltd.
03 Asian Paints Ltd.
04 Axis Bank Ltd.
05 Bajaj Auto Ltd.
06 Bank of Baroda
07 Bharat Heavy Electricals Limited
08 Bharat Petroleum Corporation
09 Bharti Airtel Ltd.
10 Cairn India Ltd.
11 Cipla Ltd.
12 Coal India Ltd.
13 DLF Limited
14 Dr. Reddy’s Laboratories Ltd.
15 GAIL (India) Ltd.
16 Grasim Industries Ltd.
17 HCL Technologies Ltd.
18 HDFC Bank Ltd.
19 Hero MotoCorp Ltd.
20 Hindalco Industries Ltd.
21 Hindustan Unilever Ltd.
22 Housing Development Finance Corporation Ltd.
23 ITC Limited
24 ICICI Bank Ltd.
25 IDFC Ltd.
26 IndusInd Bank Ltd.
27 Infosys Ltd.
28 Tech Mahindra Ltd.
29 Jindal Steel & Power Ltd.
30 Kotak Mahindra Bank Ltd.
31 Larsen & Toubro Ltd.
32 Lupin Limited
33 Mahindra & Mahindra Ltd.
34 Maruti Suzuki India Ltd.
35 NMDC Limited
36 NTPC Limited
37 Oil & Natural Gas Corporation Ltd.
38 PowerGrid Corporation of India Ltd.
39 Punjab National Bank
40 United Spirits
41 Reliance Industries Ltd.
42 Sesa Sterlite Limited
43 State Bank of India
44 Sun Pharmaceutical Industries Ltd.
45 Tata Consultancy Services Ltd.
46 Tata Motors Ltd.
47 Tata Power Co. Ltd.
48 Tata Steel Ltd.
49 UltraTech Cement Ltd.
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