"Nifty" refers to the **Nifty 50**, which is a stock market index representing the performance of 50 large and well-established companies listed on the **National Stock Exchange of India (NSE)**. The index serves as a key benchmark for the Indian equity market, providing an indication of how the market is performing overall.
Here are a few key points about Nifty:
1. **Composition**: The Nifty 50 includes 50 companies from various sectors like technology, finance, energy, healthcare, and consumer goods. These companies are chosen based on their market capitalization and liquidity.
2. **Market Representation**: The Nifty index represents approximately 65-70% of the total market capitalization of the companies listed on the NSE. It covers a wide range of industries, making it a broad representation of the Indian economy.
3. **Calculation**: The index is calculated using the free-float market capitalization method. This means that the index value is based on the market capitalization of the constituent companies, considering only the freely tradable shares (excluding restricted shares like those held by promoters).
4. **Use**: Investors, traders, and analysts use the Nifty 50 as a benchmark for market performance, to measure portfolio returns, or to track the general health of the Indian stock market.
The Nifty is commonly compared to other indices, such as the **Sensex**, which is based on the **Bombay Stock Exchange (BSE)**, and represents a different set of large companies in India.
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