What is Nifty?

Nifty is a commonly used term in the financial markets, specifically in the context of the Indian stock market. It refers to the National Stock Exchange Fifty (Nifty) index. The Nifty is a benchmark stock market index for the Indian equity market, representing the performance of the top 50 companies listed on the National Stock Exchange of India (NSE).

The Nifty index is calculated using a free-float market capitalization-weighted methodology, which means that the index reflects the market value of the companies taking into account the proportion of shares available for trading. The index is reviewed and rebalanced periodically to ensure that it accurately represents the market conditions.

Investors and traders use the Nifty as a barometer of the overall performance of the Indian stock market. It provides an indication of the direction and sentiment of the market as a whole. The Nifty is widely followed by market participants, and many financial products like index funds, exchange-traded funds (ETFs), and derivatives are based on its performance.