What Is the NIFTY 50? India's Benchmark Index Explained
The NIFTY 50 is the flagship stock-market index of the National Stock Exchange (NSE). It tracks the performance of 50 of the largest and most actively traded companies listed in India, across the major sectors of the economy.
What an index is
A stock index is a single number that represents the combined value of a basket of stocks. When people say "the market was up 1% today," they usually mean an index like the NIFTY 50 rose 1%. It's a quick barometer of overall market direction.
How the NIFTY 50 is built
The 50 constituents are chosen by market capitalisation and liquidity, and the index is free-float market-cap weighted — larger companies (by the value of shares actually available to trade) move the index more than smaller ones. The list is reviewed periodically, so companies enter and exit over time.
What it's used for
- A benchmark to measure whether a fund or portfolio beat "the market."
- The basis for index funds and ETFs that simply track the NIFTY 50.
- The underlying for NIFTY futures and options in the derivatives market.
NIFTY vs SENSEX
The SENSEX is the equivalent benchmark on the BSE, tracking 30 companies. The two move closely together because they share many of the same large constituents. Index levels and history are available on the indices pages.