Stock Market Indices :Fundamental Analysis of NIFTY

Dr.Sunitha.SAssistant Professor

School of Management Studies,National Institute of Technology (NIT) Calicut

Categorization of companies by capitalization

Large-cap: $10 billion–$200 billion Mid-cap: $2 billion–$10 billion Small-cap: $300 million–$2 billion Micro-cap: $50 million-$300 million Nano-cap: Below $50 million

Indian Context

Small-cap means different things to different people, the common definition in the Indian context are companies with market capitalization is less than Rs 150 crores.

Small Cap companies are HIGH Growth, obviously they are also High Risk.

Supreme Infratsructure, Kolsite group(plastics),Jyoti laboratories

Remember, Apple started in a garage. Microsoft started with a dream, our own homegrown Infosys started in 1981 with only seven staff, today it is a multinational conglomerate. They were all Small cap companies once!

The technical definition of Mid Cap in the Indian context is companies with market capitalization between Rs 150 - Rs 550 crores. 

Eg: Balrampur Chini, Blue-Star, Engineers India,India's large cap companies with a market capitalization of

more than Rs 550 crore. the top 400 companies, the blue chips that offer the

optimum potential for growth and earnings! ONGC,Reliance Industries,Infosys Foundation

 MARKET CLOSED as on Oct 12, 2010 16:00:48 hours IST

India Index Services & Products Ltd. (IISL) India Index Services & Products Ltd. (IISL) is a joint venture between the National Stock Exchange of India Ltd. (NSE) and CRISIL Ltd. (formerly the Credit Rating Information Services of India Limited). IISL has been formed with the objective of providing a variety of indices and index related services and products for the capital markets.

IISL has a licensing and marketing agreement with Standard and Poor's (S&P), the world's leading provider of investible equity indices, for co-branding IISL's equity indices.

Major IndicesS&P CNX NiftyCNX Nifty JuniorCNX 100S&P CNX 500Bank NIFTYNifty Midcap 50S&P CNX Defty

Nifty - Top 10 HoldingsSYMBOL,SECURITY,WEIGHTAGE(%) RELIANCE,RELIANCE INDUSTRIES LTD,11.53

INFOSYSTCH,INFOSYS TECHNOLOGIES LTD,8.66 ICICIBANK,ICICI BANK LTD.,6.95

LT,LARSEN & TOUBRO LTD.,6.34 HDFC,HDFC LTD,4.58 ITC,ITC LTD,4.45 HDFCBANK,HDFC BANK LTD,4.26 SBIN,STATE BANK OF INDIA,3.53 TCS,TATA CONSULTANCY SERV LTD,2.67 BHEL,BHEL,2.57

S&P CNX NiftyS&P CNX Nifty is a well diversified 50 stock index

accounting for 22 sectors of the economy. It is used for a variety of purposes such as benchmarking fund portfolios, index based derivatives and index funds.

S&P CNX Nifty is owned and managed by India Index Services and Products Ltd. (IISL), which is a joint venture between NSE and CRISIL. IISL is India's first specialised company focused upon the index as a core product. IISL has a Marketing and licensing agreement with Standard & Poor's (S&P), who are world leaders in index services.

Constituents l ist of S&P CNX Nifty,, , , , , , , Company Name,Industry,Symbol,Series

ACC Ltd.,CEMENT AND CEMENT PRODUCTS,ACC, Ambuja Cements Ltd.,CEMENT AND CEMENT PRODUCTS,AMBUJACEM,EAxis Bank Ltd.,BANKS,AXISBANK,EBajaj Auto Ltd.,AUTOMOBILES - 2 AND 3 WHEELERS,BAJAJ-AUTO,Bharat Heavy Electricals Ltd.,ELECTRICAL EQUIPMENT,BHEL, Bharat Petroleum Corporation Ltd.,REFINERIES,BPCL, Bharti Airtel Ltd.,TELECOMMUNICATION - SERVICES,BHARTIARTL, Cairn India Ltd.,OIL EXPLORATION/PRODUCTION,CAIRN, Cipla Ltd.,PHARMACEUTICALS,CIPLA,DLF Ltd.,CONSTRUCTION, DLF,,Dr. Reddy's Laboratories Ltd.,PHARMACEUTICALS,DRREDDY, GAIL (India) Ltd.,GAS,GAIL, HCL Technologies Ltd.,COMPUTERS - SOFTWARE,HCLTECH,HDFC Bank Ltd.,BANKS,HDFCBANK, Hero Honda Motors Ltd.,AUTOMOBILES - 2 AND 3 WHEELERS,HEROHONDA,Hindalco Industries Ltd.,ALUMINIUM,HINDALCO,Hindustan Unilever Ltd.,DIVERSIFIED,HINDUNILVR, Housing Development Finance Corporation Ltd.,FINANCE - HOUSING,HDFC,I T C Ltd.,CIGARETTES,ITC, ICICI Bank Ltd.,BANKS,ICICIBANK, Infosys Technologies Ltd.,COMPUTERS - SOFTWARE,INFOSYSTCH, Infrastructure Development Finance Co. Ltd.,FINANCIAL INSTITUTION,IDFC,Jaiprakash Associates Ltd.,DIVERSIFIED,JPASSOCIAT,Jindal Steel & Power Ltd.,STEEL AND STEEL PRODUCTS,JINDALSTEL, Kotak Mahindra Bank Ltd.,BANKS,KOTAKBANK,Larsen & Toubro Ltd.,ENGINEERING,LT, Mahindra & Mahindra Ltd.,AUTOMOBILES - 4 WHEELERS,M&M, Maruti Suzuki India Ltd.,AUTOMOBILES - 4 WHEELERS,MARUTI, NTPC Ltd.,POWER,NTPC,Oil & Natural Gas Corporation Ltd.,OIL EXPLORATION/PRODUCTION,ONGC,Power Grid Corporation of India Ltd.,POWER,POWERGRID,Punjab National Bank,BANKS,PNB, Ranbaxy Laboratories Ltd.,PHARMACEUTICALS,RANBAXY, Reliance Capital Ltd.,FINANCE,RELCAPITAL, Reliance Communications Ltd.,TELECOMMUNICATION - SERVICES,RCOM, Reliance Industries Ltd.,REFINERIES,RELIANCE, Reliance Infrastructure Ltd.,POWER,RELINFRA, Reliance Power Ltd.,POWER,RPOWER, Sesa Goa Ltd.,MINING,SESAGOA, Siemens Ltd.,ELECTRICAL EQUIPMENT,SIEMENS, State Bank of India,BANKS,SBIN, Steel Authority of India Ltd.,STEEL AND STEEL PRODUCTS,SAIL, Sterlite Industries (India) Ltd.,METALS,STER,Sun Pharmaceutical Industries Ltd.,PHARMACEUTICALS,SUNPHARMA, Suzlon Energy Ltd.,ELECTRICAL EQUIPMENT,SUZLON, Tata Consultancy Services Ltd.,COMPUTERS - SOFTWARE,TCS, Tata Motors Ltd.,AUTOMOBILES - 4 WHEELERS,TATAMOTORS, Tata Power Co. Ltd.,POWER,TATAPOWER,E Tata Steel Ltd.,STEEL AND STEEL PRODUCTS,TATASTEEL, Wipro Ltd.,COMPUTERS - SOFTWARE,WIPRO,

CNX Nifty Junior

The next rung of liquid securities after S&P CNX Nifty is the CNX Nifty Junior. It may be useful to think of the S&P CNX Nifty and the CNX Nifty Junior as making up the 100 most liquid stocks in India.

As with the S&P CNX Nifty, stocks in the CNX Nifty Junior are filtered for liquidity, so they are the most liquid of the stocks excluded from the S&P CNX Nifty. The maintenance of the S&P CNX Nifty and the CNX Nifty Junior are synchronised so that the two indices will always be disjoint sets; i.e. a stock will never appear in both indices at the same time.

Eg: Bank of Baroda. Asian Paints, Ashok Leyland etc

CNX 100 & S&P CNX 500 CNX 100 is a diversified 100 stock index accounting for 35 sector of the

economy.The S&P CNX 500 is India’s first broad based benchmark of the Indian

capital market. The S&P CNX 500 represents about 92.57% of total market capitalisation and about 91.17% of the total turnover on the NSE as on Sept 30, 2009.

The S&P CNX 500 companies are disaggregated into 72 industry indices viz. S&P CNX Industry Indices. Industry weightages in the index reflect the industry weightages in the market. For e.g. if the banking sector has a 5% weightage in the universe of stocks traded on NSE, banking stocks in the index would also have an approx. representation of 5% in the index.

BANK NIFTY Index Name,Index Date,Company Name,Close Price,Mkt. Cap in

Millions,Weightage in Index(%) CNX BANK INDEX,Oriental Bank of Commerce,274.25,68710.51273,1.149, IDBI Bank Ltd.,119.05,86284.4997,1.3962,Union Bank of India,255.75,129183.9029,1.9685,Canara Bank,393,161130,1.478 ,Bank of India,333.35,175066.3529,2.1267, Bank of Baroda,583.55,212567.6577,3.3572, Kotak Mahindra Bank Ltd.,744.25,258837.4568,4.1086,Axis Bank Ltd.,1124.5,453885.0431,9.4692,HDFC Bank Ltd.,1704.8,777584.8418,20.2409, ICICI Bank Ltd.,872.15,971441.6192,33.2136, State Bank of India,1974.3,1253444.022,17.3933

Constituents list of CNX Bank,,,, ,,,, Company Name,Industry,Symbol,Series,ISIN Code ,,,, Axis Bank Ltd.,BANKS,AXISBANK,EQ,INE238A01026 Bank of Baroda,BANKS,BANKBARODA,EQ,INE028A01013 Bank of India,BANKS,BANKINDIA,EQ,INE084A01016 Canara Bank,BANKS,CANBK,EQ,INE476A01014 HDFC Bank Ltd.,BANKS,HDFCBANK,EQ,INE040A01018 ICICI Bank Ltd.,BANKS,ICICIBANK,EQ,INE090A01013 IDBI Bank Ltd.,BANKS,IDBI,EQ,INE008A01015 Kotak Mahindra Bank Ltd.,BANKS,KOTAKBANK,EQ,INE237A01028 Oriental Bank of Commerce,BANKS,ORIENTBANK,EQ,INE141A01014 Punjab National Bank,BANKS,PNB,EQ,INE160A01014 State Bank of India,BANKS,SBIN,EQ,INE062A01012 Union Bank of India,BANKS,UNIONBANK,EQ,INE692A01016

CNX MidcapCNX Midcap The medium capitalized segment of the stock

market is being increasingly perceived as an attractive investment segment with high growth potential. The primary objective of the CNX Midcap Index is to capture the movement and be a benchmark of the midcap segment of the market.

S&P CNX DeftyS&P CNX Defty :Almost every institutional investor and off-

shore fund enterprise with an equity exposure in India would like to have an instrument for measuring returns on their equity investment in dollar terms. To facilitate this, a new index the S&P CNX Defty-Dollar Denominated S&P CNX Nifty has been developed. S&P CNX Defty is S&P CNX Nifty, measured in dollars.

S&P CNX Defty is S&P CNX Nifty, measured in dollars.

S&P CNX NiftyMethod of Computation

S&P CNX Nifty is computed using market capitalization weighted method, wherein the level of the index reflects the total market value of all the stocks in the index relative to a particular base period.

Base Date and Value

The base period selected for S&P CNX Nifty index is the close of prices on November 3, 1995, which marks the completion of one year of operations of NSE's Capital Market Segment. The base value of the index has been set at 1000 and a base capital of Rs.2.06 trillion.

What kind of averaging is done? For technical reasons, it turns out that the correct method of averaging is to take a weighted average, and give each stock a weight proportional to its market capitalisation. Suppose an index contains two stocks A and B. A has a market capitalisation of Rs.1000 crore and B has a market capitalisation of Rs.3000 crore. Then we attach a weight of 1/4 to movements in A and 3/4 to movements in B.

How to read NIFTY?

MARKET CLOSEDas on Oct 08, 2010 16:00:13 hours IST

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