Does bank nifty weight change every second?

I noticed bank nifty weights are changing every second on Ticker tape here.

So my question is, do the weight change every second in the real “Bank Nifty Index”?

If no, what are the real weights of “Bank Nifty” Index?

You mean the weightage of stocks in bank nifty ?
Obviously it will not change per second.
It is fixed and if required it will be rebalanced when it will be reviewed once per 6 months if I’m not wrong.

Yes, Stocks will remain same as they are reviewed in 6 months. But weight-age changes based upon change in market cap which will change based upon CMP


Probably ticker tape is wrong. It will change once in 6 months while re balancing.
Instead of third party data provider go with NSE website. They have clearly mentioned about the weightage and all that stuff related to indices.

I think @TradeXMaster is correct. @Tickertape will have to clarify how they can show it in their website like that.

For Instance, today it is showing HDFCBANK weightage as 35%, Top 3 are wighing 72%, but NSE has clearly said the following in their index methodology.

"Weightage of each stock in the index is calculated based on its free-float market capitalization such that no single stock shall be
more than 33% and weightage of top 3 stocks cumulatively shall not be more than 62% at the time of rebalancing."

How can the weightage of one stock be more than 33% when it violates the index methodology. Weightage is fixed for a period of 6 months.

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But on CNBC Awaaz and Ticker Tape, they say Bank NIfty has 12 stocks in it (RBL + PNB). But the NSE website only mentions 10. Plus If you sum the weights of NSE website, it is 99.23 not 100…What is missing? @Anikethan @TradeXMaster @AlgoEye

Which one is correct? Both Ticker tape and NSE are wrong?

But here NSE Mentioned 12 stocks, but did not mention weightage.

Ohhh…I assume this PDF only mentions weight of top 10 stocks, where can I find weight of bottom 2?

In their factsheet, they only mention top 10. Not only for BNF, but all other indices.

It indeed has 12, the same is mentioned in their website also.

Yes. Even if you see nifty weightage they will have mentioned only 10 stocks but nifty has 50 scripts.
That’s may be because they can’t fit it in that pdf :face_with_hand_over_mouth:

Maybe they are so insignificant, it did not mention the weightage :laughing:

The weight does change every second.

Imagine your portfolio has just 2 stocks. Each have just Rs.100 in value. Next day one stock moves 20 percent up and the other doesn’t move at all.
Your portfolio value will be 220. (100 plus 120)
So automatically the weight of stock in your portfolio has changed. Same happens will the index as well. Every sec with the movement in the market the weightage changes

This is what I understand.


In other words. If the total free float of all the companies in the index changes, and individual stocks free float also changes, then weight also should change right.
That’s exactly how index is calculated.

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If it changes per second, then why do they need to rebalance it once in 6 months ? Cause it is changing every second.
And NSE has isssued an article on bank nifty and it’s constituent on September 30. That was the latest.
So after 6 months they will re balance it.
The notion of re balancing is to alter/change constituents if required. But if it is done real time, then why do they have re rebalancing once per 6 months ? And why did they not release weightage change at the end of the day ?

If you are an investor am sure you rebalance your portfolio. Remember index is market value weights and not invested value weights. So if you agree market value changes eveey sec, so does index.
About rebalancing every 6 months, there are a lot of things also to be considered. Check the methodology for calculating index.
But the bottom line is index changes every sec or even at every fraction of a sec.

@Jason_Castelino , I saw the index PDF issue by NSE. I noticed the following,
“Calculation frequency - Real time”

So, yea. Index weightage does change according to CMP. Thanks for your replies.

Re balancing is only for including/excluding constituents and not for changing weightage as it as real time.

I remember once when HDFC bank had more weightage in nifty 50 then reliance. I wondered why that happened and later I forgot about that.
hdfc bank weightage was higher than ril when it was at 52 week high. And the NSE bank nifty weightage is as per the data on the issue date of circular when was during the re balancing day.
Thanks for clarifying.

Btw, as index weightage changes real time, isn’t it tough for ETF to track the index ? How do they manage a less tracking error ?

If it changes every second, then doesn’t the index value become cyclical ?

CMP changes → weightage changes → index changes by both’s account and the process repeats. That doesn’t sound correct.

Consder this example,
HDFC - 33% and ICICI- 23%,

If their CMP move up, their weightage also moves up, (say 34% & 24%), So BNF now is more sensitive towards these two stocks. Imaging if they gain 20% in 5 months, BNF will only react to these two stocks. This defeats the purpose of an INDEX.

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It’s just like doing something inside to show a better result.
Like 'hey look our bank nifty index is up 5% this month" but few people only know the ‘how’.
Just because the index concentrates on a better performancing stock it’s going higher and higher.

And it reduces the weightage when the stock goes down and does the opposite when it goes up.

So, during covid crash nifty/bank nifty reduced the weightage in real time for the bad peroforming stock and increased for good performing stock.
If this was not done, then nifty would have crahed further.

This this a fair thing to do ? Increasing weightage for good stocks and reducing weightage for the stock that is going down doesn’t sound like a fair thing to do.(my view)

Is the same thing done in other countries as well ?
This is like fooling investors by showing this index. (Just my opinion). With this in place. Wont it be difficult for ETFs to track index in real time ? How do they manage low tracking error ?

Calculation frequency = This means the index is calculated real-time on all days that the National Stock Exchange of India is open.

Correct. This is right.

I did dig into NSE to find the below.

So when do weights in an index change?

When corporate actions take place, the market capitalisation changes and weights have to be adjusted. Rights issues, public issues and mergers all present such problems. Of course, when index set changes take place, the portfolio has to be adjusted and weights get modified. This requires elaborate, and consistently-applied policies. These policies have been the subject of great attention and care at NSE Indices and are fully disclosed to the public.

Market capitalization changes every day with change in price. But this is free float market capitalization. This was a good learning.

That’s what I mentioned.

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