Happy 25th Birthday, Nifty50! So what has changed & what hasn’t
Out of the 50 stocks on Nifty, only 13 – HDFC Bank, Reliance Industries (RIL), HDFC, ITC, HUL, L&T, SBI, Tata Motors, Dr Reddy’s Labs, Tata Steel, Grasim, Hero and Hindalco – could keep pace in multiplying their market-caps in order to be able to ...
Growing at a compounded annual growth rate (CAGR) of 11.1 per cent, Nifty is up almost 14 times in the last 25 years. The headline index completed 25 years of its existence on Thursday.
“No man ever steps in the same river twice, for it's not the same river and he’s not the same man.”
What Greek philosopher Heraclitus said in 544 BC holds true for Nifty as well due to the churning of stocks the heartbeat index has seen every six months in the last 25 years.
Launched on April 22, 1996, the National Stock Exchange's (NSE) flagship index completed 25 years of its journey on Thursday, April 22. In between, three out of every four stocks have got thrown out of it.
Out of the 50 stocks on the index, only 13 – HDFC Bank, Reliance Industries (RIL), HDFC, ITC, HUL, L&T, SBI, Tata Motors, Dr Reddy’s Labs, Tata Steel, Grasim, Hero and Hindalco – could keep pace in multiplying their market-caps in order to be able to stay put on the index till its silver jubilee year.
Most of these 13 stocks, barring Tata Steel, Tata Motors, Grasim and Hindalco, have been among the top wealth creators in the last two-and-a-half decades.
Growing at a compounded annual growth rate (CAGR) of 11.1 per cent, Nifty is up almost 14 times in these 25 years.
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Back in 1996, the index was dominated by old-economy sectors related to energy, auto and commodities. The information technology (IT) industry had zero representation. Although financials had almost 24 per cent weightage, private banks hardly had any presence, data from Motilal Oswal Financial Services showed. Nifty's sectoral weight in 1996After the recent Nifty rebalancing that came into effect from March 31, financial services now hold a 38.03 per cent weightage, followed by IT (16.77 per cent), oil and gas (11.78 per cent) and consumer goods (11.49 per cent). Together, these four sectors comprise 78 per cent of Nifty that currently has representation from 13 sectors.
Energy, which has 13.45 per cent weightage now, had begun its Nifty journey with a weightage of 12.6 per cent in 1996. In March 2009, the sectoral weightage touched its peak at 40.74 per cent only to narrow down gradually over the next few years. Energy's high weightage in Nifty is now largely on account of RIL. Nifty's sectoral weight in 2021HDFC Bank, which has been one of the largest wealth creators among the blue chips in last 25 years, had just 0.4 per cent weightage in Nifty in 1996 and was the only representative of the private banks on the index.
10 stocks that may deliver solid returns in the next few weeks
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As Covid caseload is rising non-stop, the market has also been under pressure, with one-third of BSE500 stocks under bear grip. But that doesn’t mean you can not make money in the market. "Due to the Covid second wave impact, India has been an underperformer in April. But this has the potential to reverse when the Covid graph peaks & declines. There is safety in IT & pharma stocks which will do well irrespective of the disruptions," Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.
Here are 10 stocks that analysts recommend may deliver strong returns in the next few weeks.
As Covid caseload is rising non-stop, the market has also been under pressure, with one-third of BSE500 stocks under bear grip. But that doesn’t mean you can not make money in the market. "Due to the..
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Sun Pharma Advanced Research is currently making an attempt to stage an upside breakout of its key resistance level at Rs 166 (resistance as per change in polarity). The 14-week RSI shows a positive indication. The analyst recommends traders to buy Sun Pharma at CMP of Rs 164.90, add more on dips down to Rs 158 and wait for an upside target of Rs 182 in the next 3-4 weeks. Place a stop loss at Rs 155.
(Analyst: Nagaraj Shetti, Technical Research Analyst, HDFC Securities)
Sun Pharma Advanced Research is currently making an attempt to stage an upside breakout of its key resistance level at Rs 166 (resistance as per change in polarity). The 14-week RSI shows a positive ..
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A strong upside breakout made in early April is still intact and the stock is now poised for a decisive upside breakout of its next key overhead resistance around Rs 2,650. Volume and RSI indicators show positive indication. Traders may buy PI Industries at CMP at Rs 2,560, add more on dips down to Rs 2,450 and wait for the upside target of Rs 2,825 in the next 3-4 weeks, says the analyst. He recommends placing a stop loss at Rs 2,390.
(Analyst: Nagaraj Shetti, Technical Research Analyst, HDFC Securities)
A strong upside breakout made in early April is still intact and the stock is now poised for a decisive upside breakout of its next key overhead resistance around Rs 2,650. Volume and RSI indicators ..
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The top of March 2021 was on deteriorating volumes. Price has seen a deterioration of around 12-13 per cent from the top. On the way down we see prices declining with an increase in volumes. Directional movement index is showing a sell signal as MACD line has also turned bearish. Grasim had closed below its 50-period moving average. It is time to exit out of the stock as the price could see a potential decline to Rs 1,110 and below this to Rs 900 over the next couple of weeks, recommends the analyst.
(Analyst: Manish Shah, Trader and Trading Coach, Niftytriggers.com)
The top of March 2021 was on deteriorating volumes. Price has seen a deterioration of around 12-13 per cent from the top. On the way down we see prices declining with an increase in volumes. Directio..
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On the weekly time frame chart, Orient Refractories has seen a breakout of a massive right angled triangle. This could be a very bullish development. A breakout of a four-year-old ascending triangle is a condition to watch out for and this can trigger a massive rally in the stock. The moving averages are bullish and both the 20-week averages and 50-week averages are also bullish. The analyst has a buy recommendation on the stock for a target price of Rs 325 and above that to Rs 360 over the next 6-8 weeks. Keep a stop below Rs 250.
(Analyst: Manish Shah, Trader and Trading Coach, Niftytriggers.com)
On the weekly time frame chart, Orient Refractories has seen a breakout of a massive right angled triangle. This could be a very bullish development. A breakout of a four-year-old ascending triangle ..
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The stock is currently placed at the lower band of the rising channel, that is in place since September 2020, and the rising 50-day EMA. The analyst expects the stock to maintain its rhythm of higher base at its 50-day EMA and resume the primary up trend after last one week's corrective decline. TCS offers a fresh entry opportunity with a favourable risk reward set up. The analyst expects the stock to retest its all-time high of Rs 3,354 in the coming weeks. He recommends keeping the stop loss at Rs 3,045 on a closing basis.
(Analyst: Harmesh Shah, Head - Technical, ICICIdirect)
The stock is currently placed at the lower band of the rising channel, that is in place since September 2020, and the rising 50-day EMA. The analyst expects the stock to maintain its rhythm of higher..
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The stock is in a secular up trend forming higher peak and higher troughs. It has recently registered a resolute breakout above the rising trendline joining highs of Aug’20 and Feb’21. The weekly MACD recently generated a buy signal, thus validating a positive bias. The analyst expects Cipla to continue with its positive momentum and head towards Rs 1,025 levels. Maintain a stop loss at Rs 905 on a closing basis.
(Analyst: Harmesh Shah, Head - Technical, ICICIdirect)
The stock is in a secular up trend forming higher peak and higher troughs. It has recently registered a resolute breakout above the rising trendline joining highs of Aug’20 and Feb’21. The weekly MAC..
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The stock has witnessed a shallow retracement of the last up move as it took six sessions to retrace just 61.8% of the preceding six sessions' up move, signalling a robust price structure and a higher base formation, thus offering a fresh entry opportunity. The weekly MACD is in uptrend and seen diverging from its 9-period average, supporting a positive bias. The analyst expects Graphite India to head towards Rs 695. Maintain a stop loss at Rs 590 on a closing basis.
(Analyst: Harmesh Shah, Head - Technical, ICICIdirect)
(Image source: Graphiteindia.com)
The stock has witnessed a shallow retracement of the last up move as it took six sessions to retrace just 61.8% of the preceding six sessions' up move, signalling a robust price structure and a highe..
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The stock has reversed from the support of its 200-DMA, leading to a shift in momentum. Indicators like MACD and RSI hint that the momentum in Glenmark is likely to continue. The stock recently gave a breakout of the sideways channel as well. The analyst recommends a buy on Glenmark Pharma with the target of Rs 690. Investors are advised to maintain a stop loss at Rs 440.
(Analyst: Ashis Biswas, Head of Technical Research at CapitalVia Global)
The stock has reversed from the support of its 200-DMA, leading to a shift in momentum. Indicators like MACD and RSI hint that the momentum in Glenmark is likely to continue. The stock recently gave ..
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The stock is currently moving in an uptrend channel. It has been trading above its 200-DMA, indicating a positive outlook on the stock. The analyst expects the momentum to continue in the stock as it has also given a breakout of the triple bottom formation. He recommends a buy with a target of Rs 132 and a stop loss at Rs 75 for a medium-term perspective.
(Analyst: Ashis Biswas, Head of Technical Research at CapitalVia Global)
The stock is currently moving in an uptrend channel. It has been trading above its 200-DMA, indicating a positive outlook on the stock. The analyst expects the momentum to continue in the stock as it..
HDFC Bank (10.24 per cent) and three other stocks - Reliance Industries (10.19 per cent), Infosys (7.98 per cent) and HDFC (7.08 per cent) - make up for more than one-third of today’s Nifty. The stocks with higher weightages have more firepower to move the index up and down. Top 10 stocks on Nifty by weightage (Source: NSE)Back in 1996, SBI, HUL, Tata Motors, RIL and Tata Steel were the top five companies on the index. When energy stocks were ruling the roost, ONGC's weightage had shot up to 12.4 per cent in December 2005 and is now down to just 0.59 per cent.
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The change in the pecking order has been unkind to the PSU banks (whose weightage has come down from 12.2 per cent to 2.3 per cent) and metals (from 10.7 per cent to 2.86 per cent). Sectors like textiles (4.9%), hotels (2.2%), and shipping (0.9%), which were part of the 1996 batch, have since lost their seats in Nifty Club Elite.
Till June 2009, NSE used to take into account full market capitalisation of a stock for consideration for Nifty50 entry. Since then, the selection methodology has undergone a change to include free float market cap, besides other factors. Although RIL's market-cap of Rs 12.26 lakh crore is substantially higher than that of HDFC Bank's Rs 7.87 lakh crore today, yet the latter enjoys a higher weightage on Nifty because a higher free float market-cap.
