Nifty broad market indices consist of large, mid and small liquid stocks of companies listed on the NSE. They serve as a benchmark for measuring the performance of stocks or portfolios using weighted average, which is the sum of returns expected from a portfolio. India Index Services & Products Ltd. (IISL) unser NSE group company provides indices and index-related services for the stock exchange. Nifty indices comprise broad market indices, sectoral indices, thematic indices, strategy indices, fixed income, and hybrid indices.

So, if Bank Nifty right now is trading at 20,000, that means it’s given returns of 20 times over the last 20 years. Thematic indices is another calculation method used by what is nifty and bank nifty the NSE to measure the performance of companies that represent a movement in a specific theme. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page. Technical analysis, a cornerstone of investment, plays a pivotal role in understanding market dynamics.

Which sectors are covered in Nifty ?

Bank Nifty includes stocks of 12 major banking companies listed on the NSE. These 12 banks have a high market capitalisation and are the most active banking stocks on the NSE. To trade in Bank Nifty, investors can use various financial instruments such as futures, options or exchange-traded funds (ETFs).

The top 5 Nifty sector are as follows:

The current share price decides the weightage and the banks day to day performance has a lot of bearing on their share price and which in turns also impacts the Bank Nifty movement. The corporate policies, the innovation, the products, bank-specific news, corporate policies etc., impact the share price which in turn impacts their weightage. Benchmark indices help investors understand how the overall equity market is performing. When there are more buyers of stocks, the reading in the NIFTY 50 chart goes up representing the cost of shares, and more sellers reduces the price and the reading goes down. The index is actively engaged in options trading, empowering traders to leverage price fluctuations within the banking sector. Traders employ various options trading strategies, including straddles and strangle, to profit from market volatility.

There is a favourable relationship between the Nifty and the nifty bank index. Nifty bank options were the first to be traded weekly and offer good trading opportunities. Nifty 50 is the most referred index to track how the stock market is performing.

The bank Nifty serves as a benchmark for investors, providing insights into how banking stocks are expected to perform in general. It is a guiding light for investors to make informed decisions and to anticipate whether specific funds will yield profits or losses. The financial performance of companies is given significant weightage to ensure the inclusion of the most stable performers in the banking sector. The index includes companies with a track record of consistent profitability and good financial health. Economic indicators, government policies, global market trends, and sector-specific developments influence both indices.

Top Gainers NSE Indices

1. Users shall be the sole owner of the decision taken, if any, about suitability of the same.
2. As mentioned earlier Bank Nifty is a specialised index that measures the performance of only the banking sector of India.
3. Like the Nifty, those bullish on banks can buy Bank Nifty futures comprising 15 shares or buy a call option on Bank Nifty.
4. Please read the SEBI prescribed Combined Risk Disclosure Document prior to investing.
5. Bank Nifty includes stocks of 12 major banking companies listed on the NSE.

While Nifty gives a broad view of various sectors, Bank Nifty focuses exclusively on banking stocks. Recognizing these differences is crucial for investors and traders to make well-informed decisions aligned with their investment goals and risk tolerance. Both indices are valuable tools for assessing market sentiment and guiding investment strategies, catering to different aspects of the dynamic Indian stock market landscape. The Bank Nifty, formally known as the Nifty Bank index, is a specialised index that tracks the performance of the banking sector in India. It comprises of 12 of the most liquid banking stocks that are traded on NSE.

Nifty, which stands for National Stock Exchange Fifty, is a key stock index in India. It consists of the top 50 companies listed on the National Stock Exchange (NSE), representing various sectors of the Indian economy. These companies are chosen based on factors like their market value, how easily their stocks can be bought and sold, and how often they’re traded. Nifty is used to gauge how well the Indian stock market is doing overall. Investors and traders rely on Nifty to understand the general mood of the market and spot trends.

Bank Nifty performance

It uses the NIFTY 50 to measure companies’ performance or portfolios using weighted average and market capitalization. Bombay Stock Exchange (BSE), on the other hand, uses Sensex to measure the total value of 30 stocks of large companies listed on the BSE. Nifty 50 is a benchmark index that tracks the performance of the 50 largest blue-chip Indian companies across different sectors. Bank Nifty is a sector-specific benchmark index that tracks the performance of the top 12 banking and financial stocks in India. The Bank Nifty is also calculated using the free float market capitalization methodology. It serves there is one of the most important indicators for any investor who wants to track the banking sector of India and it is also used for derivatives trading.