Stock market index

NIFTY BANK BY :- SONALI SHARMA

STOCK MARKET INDEX

PRESENTATION IS ALL ABOUT…

Stock market indexNIFTY bank indexPortfolio characteristicsTop constituents by weightageRe-balancing and governancemethodologyMarket representationSelection criteriaCompanies in NIFTY bankPrices of stocks in NIFTY bankGraphical representation

STOCK MARKET INDEX A stock index or stock market index is a

measurement of the value of a section of the stock market. It is computed from the prices of selected stocks (typically a weighted average). It is a tool used by investors and financial managers to describe the market, and to compare the return on specific investments.

https://en.wikipedia.org/wiki/Stock_market_index




CONTD….

Weighted average of prices of stock 1, stock 2, and stock 3 are used to make a stock market index. STOCK MARKET

INDEX

Stock 3

Stock 2

Stock 1

NIFTY BANK INDEX Bank Nifty represents the 12 most liquid

and large capitalised stocks from the banking sector which trade on the National Stock Exchange (NSE). It provides investors and market intermediaries a benchmark that captures the capital market performance of Indian banking sector.

https://www.nseindia.com/live_market/dynaContent/live_watch/bn_home_page.htm



PORTFOLIO CHARACTERISTICS

Methodology Free float market capitalization

No. of Constituents 12

Launch date September 15, 2012

Base date January 1, 2000

Base value 1000

Calculation frequency

Online daily

Index rebalancing Semi-Annually

TOP CONSTITUENTS BY WEIGHTAGE

Company’s name Weight (%)HDFC bank Ltd. 31.70ICICI bank Ltd. 81.86Axis bank Ltd. 12.01Kotak mahindra bank Ltd. 10.95State bank of India 9.16IndusInd bank Ltd. 7.32Yes bank Ltd. 4.90Bank of baroda 1.96Federal bank Ltd. 1.34Punjab national bank 1.07

RE-BALANCING OF INDEX Index is re-balanced on semi-annual

basis. The cut-off date is January 31 and July 31 of each year, i.e. For semi-annual review of indices, average data for six months ending the cut-off date is considered. Four weeks prior notice is given to market from the date of change.

GOVERNANCE OF INDEX A professional team at IISL manages

Nifty Bank Index. There is a three-tier governance structure comprising the Board of Directors of IISL, the Index Policy Committee and the Index Maintenance Sub-Committee.

METHODOLOGY Nifty Bank Index is computed using free float

market capitalization method with base date of Jan 1, 2000 indexed to base value of 1000, wherein the level of the index reflects total free float market value of all the stocks in the index relative to a particular base market capitalization value. The method also takes into account constituent changes in the index and importantly corporate actions such as stock splits, rights, new issue of shares etc. without affecting the index.

https://www.nseindia.com/products/content/equities/indices/sectoral_indices.htm



MARKET REPRESENTATION The Nifty Bank Index represent about 15.6% of

the free float market capitalization of the stocks listed on NSE and 93.3% of the free float market capitalization of the stocks forming part of the Banking sector universe as on March 31, 2016.

The total traded value for the last six months ending March 2016 of all the Index constituents is approximately 12.5% of the traded value of all stocks on the NSE and 88.1% of the traded value of the stocks forming part of the Banking sector universe. https://www.nseindia.com/products/content/equities/indices/sectoral_indices.htm



SELECTION CRITERIA Selection of the index set is based on the

following criteria:

Companies ranked within top 800 based on both average daily turnover and average daily full market capitalisation based on previous six months period data are considered eligible.

The constituents should be available for trading in the derivatives segment (Stock Futures & Options market) on NSE.

CONTD…. Company's trading frequency should be at

least 90% in the last six months.

Companies should form a part of the banking sector.

A company which comes out with a IPO will be eligible for inclusion in the index, if it fulfils the normal eligibility criteria for the index for a 3 month period instead of a 6 month period.

CONTD…. Final selection of 12 companies shall be

done based on the free-float market capitalization of the companies.




COMPANIES IN NIFTY BANKCOMPANY NAME

INDUSTRY

Axis bank Banks - private sector

Bank of baroda Banks - public sector

Bank of india Banks - public sector

Canara bank Banks - public sector

Federal bank Banks - private sector

HDFC bank Banks - private sector

ICICI bank Banks - private sector

IndusInd Bank Banks - private sector

Kotak mahindra

Banks - private sector

PNB Banks - public sector

SBI Banks - public sector

Yes bank Banks - private sector

These stocks

Are includedin NIFTY

Bank index and are traded

in NSE

PRICES OF STOCKS IN NIFTY BANK

COMPANY NAME

INDUSTRY LAST PRICE

CHANGE % CHANGE

MARKET CAPITAL

AXIS BANK Bank - private

548.85 - 4.95 - 0.89 131042.46

BANK OF BARODA

Bank - public

154.85 1.05 0.68 35777.32

BANK OF INDIA Bank – public

112.30 1.75 1.58 10489.21

CANARA BANK Bank – public

261. 45 3.65 1.42 14196.50

FEDERAL BANK Bank – private

65.00 0.50 0.78 11175.94

HDFC BANK Bank – private

1236.95 - 1.85 - 0.15 313573.26

ICICI BANK Bank – private

270.60 8.95 3.42 157409.11

IndusInd Bank Bank – private

1178.30 21.85 1.89 70212.71

KOTAK MAHINDRA

Bank – private

754.00 2.30 0.31 138417.97

PNB Bank – public

132.80 3.50 2.71 26076.57

SBI Bank – public

229.25 2.55 1.12 177961.66

YES BANK Bank - private

1200.45 0.30 0.02 50558.56

GRAPHICAL REPRESENTATION

CONCLUSION As banks are the life line of our Indian

economy so bank NIFTY is one of the most important index of NSE.

Market capitalization of bank NIFTY is more than NIFTY 50 it shows that total weightage of bank NIFTY is even more than NIFTY 50.

SONALI SHARMA

THANK YOU :

Economy & Finance

Stock market index