How is NIFTY Formed?

NIFTY is formed by selecting the top 50 listed companies from approximately 6000 companies listed on the NSE.

These 50 companies are the most actively traded and have the highest  market capitalization, representing around 60% of the entire market  capitalization.

The selection of these companies is done by an index committee comprising prominent economists and experts.

NIFTY is instrumental in understanding the performance and trends of the National Stock Exchange.

It allows for an accurate estimation of market movements and provides valuable information about the country’s economic health.

While both NIFTY and SENSEX are stock indices, NIFTY 50 belongs to the  National Stock Exchange, and SENSEX is part of the Bombay Stock  Exchange.

NIFTY tracks 50 companies, whereas SENSEX tracks only 30, making NIFTY a more reliable indicator.

Both serve the same purpose of evaluating the stock market’s status and direction.

What is NIFTY and How is it Different from SENSEX?