When i just enter into stock market i don’t know anything at all like what is nifty 50 ? who created nifty 50 index ? from what price nifty 50 index started ? can we directly buy nifty 50, which shares nifty contains and how their criteria ? and much more questions.
Then one by one i read books and watch youtube videos and learn basics about market like fundamental, technical, swat analysis and many more but no one told how shares will enter into nifty 50.
Zee business editor anil singhvi do one series about future and option ki pathshala with manshi ji. In this series i learn in details about stock market works, what is free float market cap,etc
Shares needs to follow some criteria to enter into nifty 50 ?
Nifty 50 is all about top indian companies means nifty contain fifty companies that have indian origin what is this criteria. Nifty don’t have google and amazon because their origin is not indian, they are created in usa and any country doesn’t contain foreign stocks not only india but also all counrties because if india contain other stocks than indian then indian economy not giving proper data about economic conditions.
If india was in recession but usa not so how anyone will understand about it and foreign investors got confuse and invest less money into indian economy thats why nifty only have top 50 shares whose market cap is higher.
Second criteria is about free float market cap what is this. Free float market cap is how much free shares available in market for buy and sell. Those shares anyone will buy like retail investor, foreign investors and also domestic players like LIC, UTI,etc Only except promoters holding. For example any one wants to buy reliance industires shares but shares are not available in stock market then that’s not good sign for index so index not going in right direction.
Third criteria is circuit upper or lower. Any stock that in nifty 50 those never lock in circuits means if reliance was in five percent upper circuits add stop trading then index not moving upward because reliance contribute 7 percent of nifty. so reliance upper circuit will open after some time and again buying and selling started. Any shares want to enter into nifty then have no circuit.
When will share get exited from index ?
If companies shares will fall and loss market cap then nifty 100 stock will enter into index. that’s why shares need to perform consistently and make profits if any company not making money then other will take their position.
If any promoter have increases holding in their own company more than 75 percent then this stock will exit from index.
Nifty 50 was created in 2000 and started from 100 points and now it traded at 18,000 just saw how much money was maked when anyone invested at that time. Like nifty 50 sensex is also a index but sensex is most oldest index in india. Sensex have 30 shares and having same criteria like nifty index.