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What is the Nifty 50 index?

Nifty 50 index

No, it's not a list of the most eligible fiftysomethings! The Nifty 50 is the flagship index of the National Stock Exchange of India, it is a free float index and market capitalisation weighted. It’s made up of 50 of the largest and most actively traded stocks representing more than 20 industry sectors.

Key takeaways

  • The Nifty 50 is the flagship index of the National Stock Exchange of India, comprising 50 of the largest and most actively traded stocks across more than 20 industry sectors.

  • It serves as a widely-used barometer of the Indian stock market and economy for investors globally, with well-known companies like Bosch, Tata Steel and State Bank of India listed.

  • Launched in 1995 with a base value of 1,000, the index increased rapidly to around 8,000 by 2016, reflecting the strengthening Indian economy over that period.

  • The index is quite volatile and has experienced major single-day falls, including a 10% plunge in January 2008 during the US subprime mortgage crisis and a 181-point drop following Brexit.

  • The Nifty 50 is a free float and market capitalisation weighted index, with constituents that change periodically based on liquidity, turnover and volume of transactions.

Where have you heard about the Nifty 50 index?

It’s widely used by investors in India and around the world as a barometer of the Indian stock market and state of the economy. Well-known companies listed on it include Bosch, Tata Steel and the State Bank of India.

What you need to know about the Nifty 50 index.

The Nifty 50 index was launched in 1995 with a base value of 1,000 but has increased rapidly to around 8,000 by 2016 as the Indian economy goes from strength to strength.

The constituents of the index change from time to time depending on liquidity, turnover and volume of transactions.

The Nifty is quite a volatile index, and has suffered major single-day falls over the years. On January 21 2008, it plunged by more than 10% due to the subprime mortgage crisis in the US, while on the day following the Brexit vote it fell 181 points.