SHARETIPSINFO >> Articles Directory >>Why to trade in Nifty

The NSE S&P CNX Nifty 50 or NIFTY as it is most popularly known amongst the investors is the prime index of ‘The National Stock Exchange of India’. The national stock exchange or NSE is the largest stock exchange in India in terms of daily trading volume and turnover. The NIFTY index is owned and managed by India Index Services and Products Ltd. (IISL). IISL is the joint venture of NSE and CRISIL which is the first specialized company in India for managing index. CRISIL has a marketing and licensing agreement with Standard & Poor's (S&P) which is the leading company in the world in index services. NIFTY is one of the most popular indexes that are preferred by the investors for trading in index in India. Domestic retail investors, institutional investors as well as foreign investors invest directly in NIFTY or through the index funds. There are so many reasons that NIFTY is preferred by large portion of the investors who trade in indexes.

NIFTY is one of the two prime indexes in India – the other being the Sensex or the index of BSE. Being one of the fastest growing economies in the world Indian stock market is one of the most preferred destinations for investment all around the world. Naturally NIFTY being the prime index of the country it remains as the priority to the investors.

NSE S&P CNX Nifty 50 or the NIFTY index is made with the 50 major stocks that are listed in NSE. These stocks are selected on the basis of market capitalization and the stocks that make the NIFTY are key stocks in terms of value and trading volume in NSE. In fact the stocks those are part of NIFTY account for 50% of the total trading volume in NSE.

The NIFTY stocks are equally significant in terms of market capitalization. The companies that are part of the NIFTY are the most reputed and largest names in Indian economy and commerce. In fact the total market capitalization of these NIFTY stocks is 58.64% of the total market capitalization as per a report published on 31st March, 2008.

From these points it is evident that NIFTY is the prime index in India and by investing in the NIFTY index, you are practically investing in al the major listed companies in India. So with your investment in NIFTY you can be rest assured that you will get a good return over a period of time.

The diversification of the index in terms of sectors is a key feature that determines the value of the index. In this respect also NIFTY is a great index to invest in. The NIFTY stocks are selected from as much as 21 sectors. These are the prime sectors in terms of Indian business and industry like petroleum, electronics, IT, retail, FMCG, textile and so on. So it can be easily understood that with such varied investment in different sectors NIFTY index is more stable and most likely to attain a steady growth over a period of time.

Last but not the least NIFTY is managed by the two most trusted and reputed names in index management. So you can be rest assured of the effective marketing and management when it comes to NIFTY. Moreover, with the industry leaders at the managing seats you can expect optimum fairness and transparency in the managing the index that have made it a reliable source for investment.

So if you are thinking about taking a step further from equity trading and if you want to start trading in index you can also bank up on NIFTY – the leading index of Indian stock market with some of the most prestigious and blue chip stocks in the Indian stock market scenario. With your investment in NIFTY you can ensure maximum return and steady growth of your investment. You can either invest in NIFTY through derivative trading or you can also invest indirectly through the index funds.



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