The Nifty 50 is calculated by using the free-float market capitalization method . Let's break it down in detail to understand the steps, the factors that affect the Nifty 50, and how companies are added or removed from the index. 1. Free-Float Market Capitalization Method: 1.1 Formula for Nifty 50 Index Calculation: The Nifty 50 index is calculated as follows: Nifty 50 Index = ( ∑ ( Stock Price × Free-Float Market Cap ) Base Market Capitalization ) × Index Divisor \text{Nifty 50 Index} = \left( \frac{\sum \left( \text{Stock Price} \times \text{Free-Float Market Cap} \right)}{\text{Base Market Capitalization}} \right) \times \text{Index Divisor} Where: Free-Float Market Cap : Market price of the stock multiplied by the free-float factor , which is the number of shares available for trading in the market (excluding promoter shares, government shares, and shares held by insiders). Base Market Capitalization : This is the total market capitalization ...

The Nifty 50 and Sensex are the two main stock market indices in India that represent the performance of the stock market. These indices are calculated daily using a formula based on market capitalization and free-float methodology . 🔹 1. Nifty 50 Calculation (NSE) The Nifty 50 index is managed by the National Stock Exchange (NSE) and represents the performance of the top 50 stocks across various sectors. 1.1 Formula for Nifty 50 Calculation Nifty 50 is calculated using the free-float market capitalization-weighted method : NIFTY 50 Index = ( ∑ ( Stock Price × Number of Shares × Free Float Factor ) Base Market Capitalization ) × 1000 \text{NIFTY 50 Index} = \left( \frac{\sum (\text{Stock Price} \times \text{Number of Shares} \times \text{Free Float Factor})}{\text{Base Market Capitalization}} \right) \times 1000 ✅ Where: Free Float Market Cap = Market price of a stock × Number of shares available for trading (free float). Base Market C...