We know that a stock having a higher weight in the index can cause a bigger move in nifty as compared to a stock having low weight.
Now some interesting observations... the top 7 stocks have approx. 50% weightage. This means a 2% rally in these stocks followed by a 1% decline in remaining 43 stocks will still lead to a 1% gain in nifty.
Or if ITC rallies 10% in a single day and ALL the other stocks close 1% in the negative, the nifty will still close marginally in the positive!
Lastly, yesterday RANBAXY was up 28% but the weight of this is 0.24% - this means the 28% gain would have barely contributed 4 point to nifty. In contrast, a 1% move in ITC leads to a 6 point move in nifty (assuming level of 5600).
Now some interesting observations... the top 7 stocks have approx. 50% weightage. This means a 2% rally in these stocks followed by a 1% decline in remaining 43 stocks will still lead to a 1% gain in nifty.
Or if ITC rallies 10% in a single day and ALL the other stocks close 1% in the negative, the nifty will still close marginally in the positive!
Lastly, yesterday RANBAXY was up 28% but the weight of this is 0.24% - this means the 28% gain would have barely contributed 4 point to nifty. In contrast, a 1% move in ITC leads to a 6 point move in nifty (assuming level of 5600).
Kapil ji, you are doing very appreciable work in the field... thanks.
ReplyDeleteReally gr8 work kapil sir
ReplyDeleteThnks
kapil sir i want real time data sarvice for amibroker tell me plz how to cont with u ?
ReplyDeleteVisit globaldatafeeds.in for more info
Delete