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NIFTY 100 is a broad-based diversified index on the National Stock Exchange (NSE) that represents the top 100 companies from NIFTY 500 based on full market capitalization. These stocks belong to the large-cap segment and span 17 sectors of the economy, with Financial Services being heavily weighted at ~33%. IT, Oil, Gas & Consumable Fuels, FMCG, Automobile and Auto Components round up the top 5 sectors with approximately 75% weight. The NIFTY 100 index captures the combined performance of two indices: NIFTY 50 and NIFTY Next 50.
The NIFTY 100 index represents almost 76.8% of float-adjusted market capitalization on NSE. The total traded value of all index constituents is approximately 66.2% of the traded value of all stocks on NSE for the last six months.
This NIFTY 100 index was launched on December 01, 2005, with the base year set to 2003, and the base value at 1000. It is reconstituted on a semi-annual basis. NIFTY 100’s share price usually hovers around the levels of 16000. This index is owned and managed by NSE Indices Limited, previously known as India Index Services & Products Limited.
NIFTY 100 has variants in the form of the NIFTY 100 Total Returns Index and NIFTY 100 Equal Weight Index. This index is ideal for launching index funds, benchmarking fund portfolios, ETFs, and structured products.
The NIFTY 100 share price is computed by weighting its 100 stocks on the basis of free-float market capitalization relative to a particular base market value on a real-time basis. Free float refers to the shares which are not held by promoters and are readily available to the public for trading.
The constituent stocks need to meet the following eligibility criteria:
The index value is calculated as follows –
Index value = Current free-float market capitalization/ (Base free-float market capitalization * Base Index Value)
The NIFTY 100 index is reviewed semi-annually based on six months of data ending January and July. The replacement of stocks in NIFTY 100 (if any), subject to a maximum of 5 in any given year, is implemented from the last trading day of March and September after giving four weeks prior notice to the market.
Investing in the Nifty 100 can involve various approaches, including,
Before investing, evaluate your financial goals, risk tolerance, and investment horizon. Combining strategies, such as a mix of index funds, stock selection, and ETFS, can help tailor your approach to the Nifty 100 based on your preferences and risk profile.