If the underlying stocks of the index move up, the index rises and vice-versa. The market sentiment related to the banking industry is reflected in the rise or fall of the Bank Nifty index. Bank Nifty, or the Nifty Bank Index, specifically tracks the performance of the top banking sector stocks listed on the NSE. It includes the most liquid and large-cap banking stocks and serves as a benchmark for the banking sector’s performance. Bank Nifty is particularly relevant for investors interested in the banking industry, as it provides insights into the sector’s health and trends. In conclusion, Nifty and Bank Nifty are essential indexes in the Indian stock market, each with its own unique role.
Top Losers NSE Indices
- However, the Bank Nifty is known to have provided the trader with could short term returns since its volatility is higher.
- It has representation of from the public sector, private sector, and foreign banks.
- Bank Nifty is a special index in the Indian stock market that focuses solely on banking stocks.
- However, if you are looking for higher returns and are willing to take higher risks than the Bank Nifty will be the index you must choose.
As the name suggests it comprises of 50 of the largest and most traded companies that are listed in the exchange. Since it is a broad market index, the performance of Nifty is the performance of the entire stock market of India. These indices under the brand Nifty serve as a benchmark for measuring the performance of the stocks for specific sectors or industries. Businesses that share common products or services are grouped, such as auto, banks, etc. These indices consist of large, mid and small liquid stocks of companies listed on the NSE.
Bank Nifty or Nifty Bank is an index that represents the most liquid and large capitalised stocks from Indian Banking sector. It is a benchmark that captures capital market performance of Indian Banking stocks. Speaking of Bank Nifty meaning, the Nifty occupies a significant place as a prestigious equity index within the Indian financial scene, much like the Sensex does.
In which year was the Nifty Bank Index launched?
This index includes a maximum of 12 banking companies listed on the National Stock Exchange of India (NSE), accurately reflecting the capital market performance of Indian banks. The calculation of the Nifty Bank Index is based on the free float market capitalization methodology. Bank Nifty is a stock market index that tracks the performance of the banking sector in India.
Bank Nifty Performance: Bank Nifty Index Today, Week, Month, Year Change
Free-float shares are those shares that are available to the public for trading. As mentioned earlier Bank Nifty is a specialised index that measures the performance of only the banking sector of India. On the other hand, the Nifty50 represents 13 sectors including IT, banking, pharma, telecom, energy, etc. Those investors who are looking for diversifying their portfolio should invest in the Nifty50 index since it reduces the risk of investing in a single sector.
It was created by the National Stock Exchange (NSE) in 2003 to provide a free flow movement of the capital market performance of one of the critical service sectors of India, i.e., banking. Like the Nifty, those bullish on banks can buy Bank Nifty futures comprising 15 shares or buy a call option on Bank Nifty. Bears can similarly short or sell Bank Nifty futures or buy a put option on the index. Traders who hold bank shares can hedge themselves by taking contra positions on individual banks in the derivatives segment. The Nifty Bank index is made up of 12 large-cap and liquid Indian banking stock companies. The Bank Nifty index includes private and public sector banks and is widely traded in the derivative markets.
Since these are two completely different indices it is what is nifty and bank nifty difficult to compare the returns of the two. Over the long term the Nifty50 has generated more returns compared to Bank Nifty. However, the Bank Nifty is known to have provided the trader with could short term returns since its volatility is higher.