A question that leaves many of us stuck up whenever we watch news about share market is, "What is NIFTY?"

Here's all that you want to and ought to know about Nifty:

The Nifty Index is a composite of the top 50 stocks listed on the National Stock Exchange (NSE). It is a simplified tool that helps investors and ordinary people alike, to understand what is happening in the stock market and by extension, the economy. If the Nifty Index performs well, it is a signal that companies in India are performing well and consequently that the country is doing well.

An upbeat economy is usually reflected in a strong performance of the Nifty Index. A rising index is also indicative that the investors are gung-ho about the future.

Nifty index can be used by individuals to track market movements and compare performance of individual companies’ vis-ŕ-vis market performance.It assist traders and market intermediaries to evaluate performance and sentiments across the market.

In short we can say that NIFTY is our everyday guide to India's progress.

Well yes i would agree with the last statement that NIFTY would very much describe how your country is progressing or for that matter whether it is progressing or is on a declining path.If you see the current position ,NIFTY is bleeding and so is the country's position with high inflation ,oil prices rising etc.

A brief and good description of the NIFTY.Nice post Snigdha

Hang on guys lets get real with some stats......nifty is benchmark index of just top 50 stocks and we have lacs of companies registered in india and many times more which are not registered so the sample is just not good enough. a study shows that just 50 lac people hold shares and thats not even 1 percent guys of our population.

secondly you can map the growth trajectory of a country's economy with an index say nifty in the very long term but by no means in the short or medium term. Just try and understand that for economies like India where the consumption patterns are so diverse , economic robusteness cannot be a derivative of 50 companies balance sheet to an extent and some research reports alongside FII interest.

At best its an indicator with a high degree of error and not a representative by any strech of imagination

Nice post Snigdha... but being an amateur when it comes to investing, i would just like to know that if Nifty is, as you have said, just a benchmark index of the top 50 performing stocks, then how can an investor buy/sell nifty??? ..recently, one of my friends told me that he had bought nifty at 4103... and sold it at 4178.. i am sure you can throw some light on the concept behind trading in Nifty..

@ Nitin

These 50 stocks form the chunk of money that goes into the market.If you see the names here Reliance,tata .... all the big names are there in the NIFTY 50.


@ Varun

Its like you can trade on the NIFTY being at a certain level and SPECULATE that it woudl be at a certian level on a certain date.This is just an outline of the process and dere are several complexities involved in this.

@Vishal
Thanks for replying to Varun's queries