NIFTY 50 Sectoral Weightage and the Major Contributors of the Sectoral Indices

We all have heard of the Bombay stock exchange(BSE) and National Stock Exchange(NSE), they are the two major Stock Exchanges of our Country. Bombay Stock Exchange(BSE) which got established in 1875 is Asia’s largest stock exchange and over 5000 companies have been traded on BSE. On the Other hand, National Stock Exchange(NSE) which was established in 1992 introduced the first electronic trading in India and over 2000 companies are listed on NSE. Whenever we speak or hear about the stock market we Indians commonly use two terms, SENSEX and NIFTY. What are SENSEX and NIFTY? Well in one word we can say both are indices. So obviously now what is an INDEX? It’s really important to judge and measure the performance of any stock market to understand its performance over a period of time. Indices are numerical values representing the performance of a set of major companies or segments of the stock market. In a broad sense, they actually denote the economy of our nation and its growth. This means if we look at the Performance of these Indices for the past One year, it actually tells or gives signs about the overall economic performance of our nation.
Let us understand the NIFTY 50 Index, sectoral division, and weights of the NIFTY 50 Index.
The NIFTY 50 is a well-diversified 50 stock index and it represents important sectors of the economy. The base period selected for the NIFTY 50 index is the close of prices on November 3, 1995, which marks the completion of one year of operations of NSE’s Capital Market Segment. The base value of the index has been set at 1000 and has a base capital of Rs.2.06 trillion.
The NIFTY 50 index is India’s premier stock index. Launched on April 1, 1996, it’s computed using the free-float market capitalization method. Nifty 50 is used as a benchmark for many MF schemes. One can invest in Nifty 50 through index funds and ETFs. Investing in Nifty 50 provides the benefits of diversification within the Indian giants and returns in line with the economic growth.
The NIFTY 50 Index represents about 66.8% of the free-float market capitalization of the stocks listed on NSE as of March 29, 2019. The total traded value of NIFTY 50 index constituents for the last six months ending March 2019 is approximately 53.4% of the traded value of all stocks on the NSE. Effective June 26, 2009, NIFTY 50 is computed using the Free Float Market Capitalisation weighted method, wherein the level of the index reflects the free-float market capitalization of all stocks in IndexNifty 50 is a professionally maintained Index by India Index Services and Products Ltd. (IISL), which is a joint venture between NSE and CRISIL. IISL has a marketing and licensing agreement with Standard & Poor’s (S&P), who are world leaders in index services. The sectoral weights of different sectors.

Nifty Futures is one of the most traded instruments in the whole world

Lets us dive deep into the sectoral indices of NIFTY50 and the major contributors of the sectoral indices

NIFTY Bank

Index comprises the most liquid and large capitalized Indian Banking stocks. It provides investors and market intermediaries with a benchmark that captures the capital market performance of Indian Banks. As you can see the sector which carries heavyweight in the nifty 50 is the financial service sector let us dig deeper into the financial sector with intra-financial service weightage charts.

NIFTY Auto

Index is designed to reflect the behavior and performance of the sector of the Indian automobile. The NIFTY Auto Index is computed using a free-float market capitalization

Nifty Financial Services

Index is designed to reflect the behavior and performance of the Indian financial market which includes banks, financial institutions, housing finance, insurance companies, and other financial services companies.

Nifty Financial Services 25/50

Index comprises the same constituents as the Nifty Financial Services Index, where 25 refers to the maximum value for the % weight of a single stock and 50 refers to the maximum value for the aggregate % weight for all stocks with individual weight more than 5%.

NIFTY FMCG

Index is designed to reflect the behavior of FMCGs Indian companies from the Fast Moving Consumer Goods (FMCG) sector. It includes companies that deal with those goods and products, which are non-durable, mass consumption products and available off the shelf.

Nifty Healthcare

Index is designed to reflect the behavior and performance of Healthcare companies. The Nifty Healthcare Index comprises a maximum of 20 stocks that are listed on the National Stock Exchange.

• The index has a base date of April 01, 2005, with a base value of 1000.
• Stocks from the Nifty 500 at the time of review are eligible for inclusion in the index.
• Maximum of 20 companies within the Healthcare sector based on free-float market capitalization.
• The weight of each stock in the index is based on its free float market capitalization.
• The Index is reconstituted semi-annually and weights are rebalanced quarterly.
• The Information Technology (IT) industry has played a major role in the Indian economy. In order to have a good benchmark of the Indian IT sector, The NIFTY IT sector index has been developed. NIFTY IT provides investors and market intermediaries with an appropriate benchmark that captures the performance of the IT segment of the market in India.

NIFTY Media

Index is designed to reflect the behavior and performance of the Media & Entertainment sector including printing and publishing in India.

NIFTY Metal

Index is designed to reflect the behavior and performance of the metals sector including mining in India.

NIFTY Pharma

Index is designed to reflect the behavior and performance of the pharmaceutical sector in India.

NIFTY Private Bank

Index is designed to reflect the performance of the banks from the private sector.

NIFTY PSU Bank

Index is designed to reflect the performance of the public sector banks.

NIFTY Realty

Index is designed to reflect the performance of real estate companies that are primarily engaged in the construction of residential and commercial properties.

Nifty Consumer Durables

Index is designed to reflect the performance of stocks belonging to the Consumer Durables industry. The Nifty Consumer Durables Index comprises a maximum of 15 stocks that are listed on the National Stock Exchange.

• The index has a base date of April 01, 2005 and a base value of 1000.
• Stocks from Nifty 500 at the time of review are eligible for inclusion in the index.
• Maximum of 15 companies in the Consumer Durables industry are selected based on free-float market capitalisation.
• The weight of each stock in the index is based on the free float market capitalization.
• Index is reconstituted semi-annually and weights are rebalanced quarterly.

Nifty Oil & Gas

Index is designed to reflect the performance of the stocks belonging to the Oil, Gas, and Petroleum industry. The Nifty Oil & Gas Index comprises a maximum of 15 stocks that are listed on the National Stock Exchange.

• The index has a base date of April 01, 2005 and a base value of 1000.
• Stocks from Nifty 500 at the time of review are eligible for inclusion in the index.
• Maximum of 15 companies within the Oil, Gas & Petroleum industry are selected based on free-float market capitalisation.
• The weight of each stock in the index is based on the free float market capitalization.
• Index is reconstituted semi-annually and weights are rebalanced quarterly.