How to calculate nifty index price

Table of Contents

Introduction

In this article, I will present to you a detailed understanding of what Nifty 50 is and more importantly how to calculate it step by step.

I will also extend this methodology to another popular index, Bank Nifty.

You may have traded Nifty for most of your trading life but there is a high probability that trivial questions like how it’s calculated never would have occurred or some of you have attempted but not got enough clear answers.

I will attempt to solve this mystery with a very simple approach which I must confess I discovered after an extensive online search.

What is Nifty 50?

Nifty is the premier indicator (let’s call it Index) of the stock markets of India, specifically the NSE.

It has surpassed Sensex, an index of BSE in popularity and trading volume.

Nifty calculation formula

So, what is an index? In simple terms, it’s just the average value of stocks. Obviously for Nifty, as its name suggests it will have 50 stocks chosen from 13 sectors of the economy.

There are multiple reasons why bourses create indices but the most important one is, that it is a s

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