CNX NIFTY INDEX
The CNX Nifty, also called the Nifty 50 or simply the Nifty, is National Stock Exchange of Indiaʹs benchmark stock market index for Indian equity market. Nifty is owned and managed by India Index Services and Products (IISL), which is a wholly owned subsidiary of the NSE Strategic Investment Corporation Limited. IISL had a marketing and licensing agreement with Standard & Poorʹs for co-branding equity indices until 2013. The ʹCNXʹ in the name stands for ʹCRISIL NSE Indexʹ.
CNX Nifty has shaped up as a largest single financial product in India, with an ecosystem comprising: exchange traded funds (onshore and offshore), exchange-traded futures and options (at NSE in India and at SGX and CME abroad), other index funds and OTC derivatives (mostly offshore).
The CNX Nifty covers 22 sectors of the Indian economy and offers investment managers exposure to the Indian market in one portfolio. During 2008-12, CNX Nifty 50 Index share of NSE market capitalisation fell from 65% to 29% due to the rise of sectoral indices like CNX Bank, CNX IT, CNX Mid Cap, etc. The CNX Nifty 50 Index gives 29.70% weightage to financial services, 0.73% weightage to industrial manufacturing and nil weightage to agricultural sector.
The CNX Nifty index is a free float market capitalisation weighted index. The index was initially calculated on full market capitalisation methodology. From June 26, 2009, the computation was changed to free float methodology. The base period for the CNX Nifty index is November 3, 1995, which marked the completion of one year of operations of National Stock Exchange Equity Market Segment. The base value of the index has been set at 1000, and a base capital of Rs 2.06 trillion.
How NSE brought about a paradigm shift in Financial market
NSE was mainly set up to bring in transparency in the markets. Instead of trading membership being confined to a group of brokers, NSE ensured that anyone who was qualified, experienced and met minimum financial requirements was allowed to trade. In this context, NSE was ahead of its times when it separated ownership and management in the exchange under SEBIʹs supervision. The price information which could earlier be accessed only by a handful of people could now be seen by a client in a remote location with the same ease. The paper-based settlement was replaced by electronic depository-based accounts and settlement of trades was always done on time. One of the most critical changes was that a robust risk management system was set in place, so that settlement guarantees could protect investors against broker defaults.
NSE was also instrumental in creating the National Securities Depository Limited (NSDL) which allowed investors to securely hold and transfer their shares and bonds electronically. It also allowed investors to hold and trade in as few as one share or bond. This not only made holding financial instruments convenient, but more importantly eliminated the need for paper certificates and greatly reduced the incidents of forged or fake certificates and fraudulent transactions that had plagued the Indian stock market. The NSDLʹs security, combined with the transparency, lower transaction prices and efficiency that NSE offered, greatly increased the attractiveness of the Indian stock market to domestic and international investors.
Trading on the equities segment takes place on all days of the week (except Saturdays and Sundays and holidays declared by the Exchange in advance). The market timings of the equities segment are:
(1) Pre-open session
- Order entry & modification Open: 09:00 hrs
- Order entry & modification Close: 09:08 hrs*
*with random closure in last one minute. Pre-open order matching starts immediately after close of pre-open order entry.
(2) Regular trading session
- Normal/Retail Debt/Limited Physical Market Open: 09:15 hrs
- Normal/Retail Debt/Limited Physical Market Close: 15:30 hrs.