What is Nifty?
Nifty refers to the leading stock index used by big corporations on India’s NSE or National Stock Exchange. The word “Nifty” is short for “Nifty 50” or “S&P CNX Nifty” which stands for Standard and Poor’s CRISIL NSE Index 50. The number “50” refers to the 50 stock indexes of large corporations that are well diversified as these represent 23 economic sectors in India. Nifty is the mostly used stock index in measuring the performance of company stocks and the NSE stock market itself. Some traders use the nifty index for derivatives, index funds, and to benchmark fund portfolios.

Owned and managed by a joint project involving the NSE and CRISIL and developed by Susan Thomas and Ajay Shah, the nifty stocks account for more than half or even up to 60% of total market capitalization in the whole of India’s NSE or National Stock Exchange. This means that the nifty index is used as a market cap index (weighted) that is free floating. Based on this methodology, one third of the weighted index constitutes the top four traded stocks. But if the top eight accounts are taken into consideration, this automatically represents about 50% of the weighted index value based on data gathered from the middle of 2009 up to late 2010.

Since stock markets are very volatile and sensitive to various changes in a particular country or in the whole world for that matter, it is important for investors to really research trends and get expert advise before involving oneself in investing and/or trading. Basic occurrences such as calamities, political problems, and various issues concerning the government could greatly affect stock markets. The nifty index is just one basis in analyzing the movement of stocks and the overall health of the stock market. Though this index is used by many as a good indicator of good or bad stocks, it is still best advice to consult with the best and right professionals.