Summary of article “Nifty 50 is a Different India”

Here is the link to the article http://www.nooreshtech.co.in/2020/05/nifty50-is-a-different-india-economy-not-equal-to-nifty50.html?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+TechnicalViewByNooresh+%28Technical+view+by+Nooresh+on+Sensex%2FStocks%2FCommodities%29

In this article, it is shown that how some sector or top companies dominate indices like NIFTY 50. That’s why NIFTY 50 cannot be considered as the indicator of Indian economy.

Top 7 companies together make 52.1% of NIFTY 50.

Two companies together make 30% (reliance Industries – 11.54% and HDFC and HDFC Bank – 18.63%).

BSE’s (Bombay Stock Exchange) market capitalization is Rs. 1,23,83,500 crore. Out of this, top 30 companies together make 51.5% and there are more than 2000 companies on BSE.

Main problem is that financials are dominating index whereas sectors like metals, construction, cement etc. which are biggest driver of growth and jobs in economy doesn’t have much weightage.

So Nifty should not be considered as an indicator of Indian economy because it can convey a different story.