Nifty50 is India’s top stock market index and is the official benchmark of the National Stock Exchange. India has two major stock exchanges, the National Stock Exchange and Bombay Stock Exchange which have Sensex as its official index.
Nifty50 comprises the country’s 50 most actively traded stocks that reflect upon 13 different sectors of the economy including I.T, Energy, Minerals, Metals, Pharmaceutical, Media, Entertainment, and other consumer goods.
SGX Nifty
SGX Nifty or the Singapore Stock Exchange Nifty is an official derivative of the Nifty index that’s traded in the Singapore Stock Exchange. SGX Nifty trades for 16 hours a day from 6:30 AM to 11:30 AM IST whereas the Indian market trading hours last for 6 and a half hours.
SGX Nifty makes Nifty way more accessible to investors across the globe, who are unable to trade in the Nifty 50 of Indian market due to short operating hours. Due to its long trading hours however, SGX Nifty is actually more volatile than the NSE Nifty leaving global traders making positions on SGX for hedging purposes over any other reason.
SENSEX
Sensex is the official index for the Bombay Stock Exchange and is also calculated by the free-float market capitalization method. The word Sensex, like Nifty50, is a derivative of ‘Sensitive Index’. Sensex comprises thirty active stocks from thirty of the top companies in the country which determines the index. While the base value for Nifty is 1000, that of Sensex is 100.
Nifty50 is preferred over Sensex because of its diversified risk, it’s a widely tracked benchmark, and the fact that Sensex retains symbolic value.
Nifty 50 share prices and values
After being able to understand what Nifty50 is, What are the companies that are a part of it, how it is calculated, and other aspects, we would ideally look into how to trade at Nifty share prices.
A derivative contract, where a price or product derives its value from underlying assets, is the same idea followed by Nifty50. The underlying asset here is the Index itself, that is, the Nifty50 Index on spot level. The contacts derive all value from Nifty Index Spot Level which means if the Index spot price fluctuates then the Nifty50 Futures value will fluctuate with respect to the index.
The contracts are available in three different expiry options of Current, Mid, and Far month. Nifty50 future is India’s most liquid and popular future contract instrument in the country.
Advantages of trading with Nifty
Nifty is the most preferred stock index for investors to trade in the country, owing to many factors that allow trading to be very convenient. It is also a common practice to track the Indian stock market by following the Nifty50 Index.
- Nifty50 consists of different stocks in different sectors. This makes your trading risks a diversified one because if the price of one stock comes down, the overall price of Nifty won’t come crashing down.
- The share price of the index moves as per the collective movement of all 50 stocks present. There can be no room to manipulate these prices.
- As we mentioned, Nifty is the most liquid counter in the Stock market in the country.
- The trading margins for usual stocks are up to 20-25% but Nifty only requires 3-5% margins.
- Compared to other stocks, this Index is less volatile, having faced only 3.69% fall in the worst fall of the index.
- Nifty50 is not only easy to understand but is equipped with multiple tools to make understanding and analyzing stock prices very easy. Usually, you need Fundamental and Technical Stock analysis to fully understand what investment you’re making but Nifty makes things easier.
Nifty50 is the easiest yet most profound way to invest and trade stocks, however as easy as it is, some finance and stock market knowledge is required to make investments. If you’re beginning out, having an expert analyze Nifty share prices and tell you what best investment to make will keep you from making more severe mistakes.
