What is Nifty in Stock Market?

You must have heard the name of Nifty at some point in the stock market, but when we hear that:-

1. Today Nifty went up by so many points
2. today Nifty fell a few points,
3. Someone lost money due to Nifty falling
4. So some investors benefited from Nifty rising by a few points.

But after hearing all this things, we do not understand what NIFTY means?

If you are also interested in the stock market and want to know what Nifty is and how Nifty goes up and down in the stock market every day and how it is different from Sensex, then definitely read this post till the end.

Nifty is a benchmark index of the stock market which tells the condition of the entire stock market. By looking at Nifty you can tell whether the stock market is up or down today, meaning whether the stock market is up or down.

Nifty does the job of showing how the stock market is going these days. There are only two indexes in the Indian stock market, Sensex and Nifty. Like Nifty, Sensex also tells the condition of the stock market.

The only difference between these two is that –

Nifty 50 is an index of the National Stock Exchange (NSE) which includes the top 50 companies of India.
Whereas Sensex is the index of Bombay Stock Exchange (BSE) which includes the top 30 companies of India.

Till now you have known what Nifty is, now you know that –

Q.1 When was Nifty started?
Nifty was started in 1994. At that time its base value was kept at 1000 and with increasing progress today the value of Nifty has reached around 20000.

Q. 2 Why was Nifty started?
As you know that nowadays shares are bought and sold online but in olden times shares had to be bought and sold physically through brokers.

This was because at that time there was no online system available through which we could trade shares, till then there was only Bombay Stock Exchange i.e. BSE located in Mumbai.

That is why the government of our country decided that a new stock exchange should be created on which shares can be bought and sold online. That is why the National Stock Exchange i.e. NSE was established and from then onwards NIFTY also started.

When Nifty was not formed, before that only SENSEX used to tell the condition of the stock market. But gradually both Nifty and Sensex became quite popular to indicate the condition of the stock market and at the same time, most of the shares started being bought and sold online only on both BSE and NSE.

1. How to buy and sell shares?
2. Rules for buying shares
3. How does Nifty work?

Nifty serves to indicate the performance of India’s top 50 companies in the stock market. You can tell whether the stock market is up or down today just by looking at these 50 companies.

Now some people might be thinking that only 50 companies are included in Nifty, then how does it tell the condition of the entire stock market?

How does Nifty tell the condition of the entire stock market?

Because stocks of more than 7000 companies are listed in the stock market, then looking at NIFTY (which shows the performance of only top 50 companies of India), how can we assume that it gives the correct performance of the stock market and what about the other companies? will be?

So the answer to your question is that if we look at the market cap (market capitalization) of these top 50 companies of Nifty, it is equal to the market cap of thousands of other companies listed in the stock market because it is the most liquid company in India.

Liquid company means a company in which shares are bought and sold in large quantities. And you can easily buy or sell the stocks of these companies.
Because there are many such small stocks in India whose shares you cannot buy or sell due to less number of buyers and sellers in them, because when you place an order to buy them, your order goes into pending.

That’s why avoid buying such cheap shares or penny stocks and always invest your money in good companies only. If possible, buy stocks of these top 50 companies only.

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