The Nifty is a benchmark Indian Stock Market index representing the weighted average of 100 of the largest Indian companies listed on the National Stock Exchange. It ranks fourth in the world by Equity Trading volume, covers 14 sectors of the Indian economy, and depicts the strength of the Indian Stock Market anytime.
Nifty 100 is an index that represents the significant sectors of the Indian economy. Also called NSE 100, it includes the top 100 companies based on entire market capitalisation. The index intends to track their performance. Of these companies, 50 are listed on Nifty 50, while the balance 50 are a part of the Nifty Next 50.
Factors
Stock Markets are susceptible to various factors, ranging from complex issues like economic performance and Gross Domestic Product to politics, people, psychology, industry performance, interest rates, etc. Further, these determinants are of paramount significance or a one-time occurrence. In India, Sensex and Nifty are essential indices. Some factors affecting them include:
Government stability
Changes in government policies have led to Nifty 100 over the years. At the same time, the budget and election results also impact it.
Index of Industrial Production
This represents the growth of different sectors of the Indian economy.
RBI rates
A change in interest rates links to inflation, and the Reserve Bank of India decides them.
International market performance
Developments worldwide and the corresponding performance of international markets can impact Nifty since there is a correlation between them.
Inflation
As stated earlier, interest rates depend on inflation data, and they directly impact the country’s economic growth. If the inflation is high, the banks increase the interest rates to control this. It, in turn, lead the investors to park their money with the bank instead of Stocks.
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Gold prices
Gold returns may not be as lucrative as Equities but are still safer. Furthermore, it serves as a hedge against inflation, and so many investors have gold as a part of their diversified portfolio. An increase in the gold price is perceived as a sign of a bear market since it implies that people are reluctant to park their funds in Equities and Stocks.
Gross domestic product
Also called GDP, it is a clear indicator of the growth and performance of the country’s economy. A better GDP boosts investors’ confidence and leads them to invest in the market. Besides these, other factors determine Nifty 100, including fuel price volatility, upgrade or downgrade in ratings, recession or economic boom, etc.
How to invest?
You must invest in all the constituents of NSE 100. While it is possible to invest in all 100 companies, thorough research helps. Most companies listed on the NSE are on the BSE as well. You must open a Demat and Trading Account with any stockbroker in India to invest in these. Once done, buy and sell the shares of a Nifty company.
Disclaimer – ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. – ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai – 400 025, India, Tel No : 022 – 6807 7100. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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