What is Nifty and Bank Nifty in Stock Market? – List of Bank Nifty and Nifty 50
What is Nifty and Bank Nifty in Stock Market?
Nifty and Bank Nifty are stock market indices in India. Nifty (Nifty 50) is an index that comprises 50 of the largest publicly traded companies listed on the National Stock Exchange (NSE) of India.
It serves as a benchmark for the Indian equity market and is considered to be a barometer for the Indian economy.
Bank Nifty, on the other hand, is an index that comprises the 12 most liquid and large capitalized banking stocks listed on the NSE. It serves as a benchmark for the Indian banking sector.
Both Nifty and Bank Nifty are calculated using free float market capitalization weighted methodology, where the level of the index reflects the total market value of all the stocks in the index relative to a particular base period.
This means that the larger the market capitalization of a company, the higher the weight it gets in the index.
The Nifty index is widely used by fund managers and investors as a benchmark for their portfolios.
It is also used as an underlying index for a variety of financial products such as index funds, exchange-traded funds (ETFs), and index futures and options contracts.
Similarly, Bank Nifty is widely used as an underlying index for financial products such as index funds, ETFs, and index futures and options contracts specifically related to the banking sector.
The Nifty and Bank Nifty indices are owned and managed by India Index Services and Products (IISL), a subsidiary of the NSE.
IISL is responsible for maintaining and updating the indices to ensure that they accurately reflect the performance of the underlying companies.
What is the Difference between Nifty and Bank Nifty?
The main difference between Nifty and Bank Nifty is the companies and sectors they represent.
Nifty (Nifty 50) is an index that comprises 50 of the largest publicly traded companies listed on the National Stock Exchange (NSE) of India, and it serves as a benchmark for the Indian equity market.
It represents a wide range of sectors such as consumer goods, information technology, healthcare, banking, and more.
On the other hand, Bank Nifty is an index that comprises the 12 most liquid and large capitalized banking stocks listed on the NSE.
It serves as a benchmark for the Indian banking sector. It represents only the banking sector of the Indian stock market.
Another difference is the way the indices are calculated.
Both Nifty and Bank Nifty are calculated using free float market capitalization weighted methodology, where the level of the index reflects the total market value of all the stocks in the index relative to a particular base period.
However, since Nifty represents a broader range of sectors, it is more diversified than Bank Nifty which represents only the banking sector.
Bank Nifty List
The Bank Nifty index comprises the 12 most liquid and large capitalized banking stocks listed on the National Stock Exchange (NSE) of India. The current list of companies included in the Bank Nifty index is as follows:
- HDFC Bank Ltd
- State Bank of India
- ICICI Bank Ltd
- Kotak Mahindra Bank Ltd
- Axis Bank Ltd
- IndusInd Bank Ltd
- RBL Bank Ltd
- Federal Bank Ltd
- Bandhan Bank Ltd
- IDFC First Bank Ltd
- Lakshmi Vilas Bank Ltd
- Yes Bank Ltd
It is important to note that the composition of the index may change over time as companies are added or removed based on their liquidity and market capitalization.
Nifty50 List
The Nifty 50 index comprises 50 of the largest publicly traded companies listed on the National Stock Exchange (NSE) of India. The current list of companies included in the Nifty 50 index is as follows:
- Reliance Industries Limited
- Tata Consultancy Services Limited
- HDFC Bank Limited
- Housing Development Finance Corporation Limited
- Kotak Mahindra Bank Limited
- Bharat Petroleum Corporation Limited
- L&T Finance Holdings Limited
- Indian Oil Corporation Limited
- Bharti Airtel Limited
- HDFC Asset Management Company Limited
- Axis Bank Limited
- Bajaj Finserv Limited
- Bajaj Finance Limited
- ONGC Limited
- UltraTech Cement Limited
- State Bank of India
- ICICI Bank Limited
- Tata Steel Limited
- Power Grid Corporation of India Limited
- Wipro Limited
- Coal India Limited
- NTPC Limited
- GAIL (India) Limited
- Hero MotoCorp Limited
- Hindustan Unilever Limited
- Tata Motors Limited
- Tata Motors Limited (DVR)
- Bharat Heavy Electricals Limited
- Maruti Suzuki India Limited
- Zee Entertainment Enterprises Limited
- Asian Paints Limited
- Eicher Motors Limited
- Grasim Industries Limited
- HCL Technologies Limited
- IndusInd Bank Limited
- Infosys Limited
- ITC Limited
- JSW Steel Limited
- Larsen & Toubro Limited
- Mahindra & Mahindra Limited
- Nestle India Limited
- Oil & Natural Gas Corporation Limited
- Kotak Mahindra Bank Limited
- ONGC Limited
- Power Grid Corporation of India Limited
- Reliance Industries Limited
- Tata Steel Limited
- Tata Motors Limited
- Wipro Limited
- Bharat Petroleum Corporation Limited
It is important to note that the composition of the index may change over time as companies are added or removed based on their liquidity and market capitalization.
The index is owned and managed by India Index Services and Products (IISL), a subsidiary of the National Stock Exchange (NSE). IISL is responsible for maintaining and updating the index to ensure that it accurately reflects the performance of the underlying companies.
FAQs
How can I invest in NIFTY and Bank Nifty?
You can invest in NIFTY and Bank Nifty through index funds or exchange-traded funds (ETFs) that track the performance of the indices. These investment vehicles provide exposure to a basket of stocks represented by the indices. Alternatively, you can also invest in the individual stocks that make up the indices.
Who owns and manages NIFTY and Bank Nifty?
The index is owned and managed by India Index Services and Products (IISL), a subsidiary of the National Stock Exchange (NSE). IISL is responsible for maintaining and updating the index to ensure that it accurately reflects the performance of the underlying companies.
How often is the composition of NIFTY and Bank Nifty reviewed?
The composition of NIFTY and Bank Nifty is reviewed periodically, usually on a semi-annual basis. Changes in the composition of the indices are made based on the liquidity and market capitalization of the underlying companies.
How are NIFTY and Bank Nifty calculated?
Both NIFTY and Bank Nifty are calculated using free float market capitalization weighted methodology, where the level of the index reflects the total market value of all the stocks in the index relative to a particular base period.
What are the benefits of trading Bank Nifty?
Trading Bank Nifty can provide investors with a way to gain exposure to the Indian banking sector without having to purchase individual stocks. It also allows for diversification of risk, as the index comprises a basket of stocks, rather than a single stock. Additionally, trading Bank Nifty derivatives such as options and futures can provide investors with additional ways to hedge their risk and potentially earn higher returns.
What are the tax implications of trading Bank Nifty?
The tax implications of trading Bank Nifty will depend on the type of investment and the length of time it is held. Short-term capital gains from trading Bank Nifty derivatives are taxed at the same rate as the individual's income tax rate, while long-term capital gains are taxed at a lower rate. Additionally, you may be required to pay Securities Transaction Tax (STT) on the sale of derivatives. It's always recommended to consult with a tax professional before making any investment decisions.
What type of trading strategies can be used for Bank Nifty?
There are a variety of trading strategies that can be used for Bank Nifty, such as trend following, mean reversion, and breakout strategies. It is important to find a strategy that aligns with your investment goals and risk tolerance. Additionally, it's always recommended to use proper risk management techniques to avoid any significant loss.
How can I trade Bank Nifty?
You can trade Bank Nifty through a broker that offers trading in the NSE. You will need to open a trading account with the broker and deposit funds into the account before you can begin trading. Additionally, you'll need to do your own research and analysis before taking any position on the index.
What is the minimum investment required to trade Bank Nifty?
The minimum investment required to trade Bank Nifty will vary depending on the broker and the type of trading account you have. Some brokers may require a minimum deposit of a few thousand rupees, while others may have no minimum deposit requirement. Additionally, trading derivatives such as options and futures may require a higher minimum investment.
What are the risks of trading Bank Nifty?
Like any other form of trading, there are risks associated with trading Bank Nifty. The performance of the index is subject to market conditions, economic conditions, and political conditions, among other factors. Additionally, trading derivatives such as options and futures can be risky and may result in significant losses if the market moves against the investor's position.