Nifty bank Share Price - Live Nifty bank Index Live Charts | Research 360 by Motilal Oswal

Nifty Bank Stock Price

+8.25 (+0.02%)
16:14 Jul 12



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Nifty Bank Performance
Period Return High Low
1 Day 0.02% 52795 52171
1 Week -1.55% 52711 51749
1 Month 5.18% 53358 49693
3 Months 7.65% 53358 46078
6 Months 10.2% 53358 44429
1 Year 16.84% 53358 42105

Market Movers

Bank Nifty Stocks

What is the Bank Nifty Index all about?

The Nifty Bank Index, also known as Nifty Bank, serves as an indicator to measure the performance of select banking sector stocks listed on the National Stock Exchange (NSE) of India. Imagine it as a tool that helps investors understand how well major banks in India are doing and the overall health of the banking industry.

When you hear about the Nifty Bank stocks rising or falling, it indicates whether the included shares, as a whole, are doing better or worse in the market compared to the previous day or a specified period. For instance, if the Nifty Bank Index goes up, it suggests that banking stocks are generally performing well, and vice versa.

How is the Value of Nifty Bank Index Calculated?

The Nifty Bank Index isn't just a random number. Its value is calculated based on a method called the free-float market capitalisation-weighted method.

Imagine each bank stock in the index has its own weight or importance based on its market value and how many shares are freely available for trading. This method ensures that bigger banks with higher market values have more influence on the index compared to smaller ones.

So, when you see the Bank Nifty Index value, it reflects the combined market capitalisation of all the banks in the index, adjusted to consider only the freely available shares for trading.

It is important to note that not any random banking stock can fit into the Bank Nifty Index. To be included in the Bank Nifty Index, stocks must adhere to a set of eligibility criteria. Firstly, they should be part of the Nifty 500, a comprehensive index representing the top 500 stocks in the Indian stock market. Eligible stocks must belong to the banking sector and have a trading frequency of at least 90% over the same period, indicating active market participation.

Furthermore, companies need a listing history of at least six months and should be tradable in the Futures & Options (F&O) segment of the market. Recent IPOs may be considered if they meet the mentioned eligibility criteria for a minimum of three months. During rebalancing, individual stock weights are capped at 33%, with the combined weight of the top three stocks capped at 62%.

Eligible companies are ranked based on their average free-float market capitalisation, and those with a market capitalisation at least 1.5 times that of the smallest constituent are considered for inclusion in the index. The Nifty Bank index undergoes a biannual review, utilising data from the preceding six months, concluding on January 31st and July 31st annually. Any necessary changes to the list of stocks comprising the Nifty Bank index are executed on the final trading day of March and September.

How can I invest in Nifty Bank Stocks?

Investing in Nifty Bank stocks is quite straightforward. You have a few options:

Individual Stocks:

You can buy shares of specific banking companies listed on the NSE that are part of the Bank Nifty Index. This means you directly own a portion of that bank and benefit from its performance.

Exchange-Traded Funds (ETFs):

Another way is to invest in ETFs that track the Bank Nifty Index. ETFs are like baskets of stocks that mimic the performance of the index, offering you exposure to multiple banking stocks in a single investment.

Index Funds:

Similar to ETFs, index funds also replicate the performance of the Bank Nifty Index. They are managed funds designed to match the index's returns, making them a convenient option for passive investors.

Nifty Bank Index FAQ's

The Nifty Bank represents a benchmark index that tracks the performance of select banking sector stocks listed on the National Stock Exchange (NSE) of India. It provides investors with an indication of how banking stocks are performing collectively within the Indian stock market.

The Bank Nifty index comprises a predefined basket of 12 banking sector stocks listed on the National Stock Exchange (NSE) of India. These stocks are selected based on various criteria, including market capitalization, liquidity, and sector representation.

The Nifty Bank Index was launched on September 15, 2003, by the National Stock Exchange (NSE) of India. Since its inception, it has become one of the most widely tracked and traded indices in the Indian stock market, particularly for investors interested in the banking sector.

Yes, shares of individual companies included in the Bank Nifty index can be traded on the National Stock Exchange (NSE) of India during regular trading hours. Additionally, investors can trade Bank Nifty futures and options contracts, which are derivative instruments based on the performance of the Bank Nifty index.

The primary objective of the Bank Nifty index is to provide investors with a benchmark to track the performance of the banking sector in India. It allows market participants to assess the overall health and direction of the banking industry, serving as a valuable tool for portfolio management, risk assessment, and investment decision-making.

Investors can hold positions in Bank Nifty stocks or derivatives for varying durations depending on their investment objectives and trading strategies. Some investors may hold Bank Nifty stocks for the long term as part of a diversified investment portfolio, while others may engage in short-term trading or speculation based on market trends and technical analysis.

Reading a Bank Nifty chart involves analysing price movements, trends, and patterns displayed on the chart over a specific time frame. Traders and investors use technical indicators such as moving averages, relative strength index (RSI), and volume to interpret market sentiment and identify potential entry and exit points for trading or investment decisions. Additionally, chart patterns such as support and resistance levels, trendlines, and candlestick patterns can provide valuable insights into future price movements of Bank Nifty stocks.

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