Nifty 50 History: Index Movement And PE Ratio From 1990 To 2024 - Forbes India (2024)

The NIFTY index is often seen as a measure of India’s economy. This is because it’s an index based on the top stocks from the National Stock Exchange (NSE), established in April 1996 to capture the performance of the Indian equity market. The NSE is the largest stock exchange in the country, established in 1992 to modernise the country's capital markets and provide an efficient platform for trading securities. So it makes sense that the country looks up to it as a gauge of our finances.

Nifty 50 is owned and handled by NSE Indices (previously known as India Index Services & Products Limited), an entirely owned subsidiary of the NSE Strategic Investment Corporation Limited. The index was implemented to represent the performance of the top 50 companies added to the NSE, selected based on predefined criteria such as market capitalisation, liquidity, and trading volume. The NIFTY 50 index spans 13 sectors of the Indian economy, offering a single portfolio for market exposure. As of July 2024, it allocates 34.44 percent to financial services (including banking), 12.52 percent to information technology, 12.56 percent to oil and gas, 8.04 percent to consumer goods, and 8.5 percent to automotive.

Nifty from 1990 to 2024

Here is the Nifty index data from 1990 to 2024, collected in December each year, and sourced from Sensexindia.

Nifty PE ratio chart

The Nifty PE Ratio, or Price-to-Earnings Ratio, is a crucial valuation metric in the Indian stock market. It's calculated by dividing the Nifty 50 index's market capitalisation by the total earnings of its constituent companies.Here is the Nifty PE ratio chart data for December of each year, from 2000 to 2024.

Major Milestones (from 1990 to 2024)

The journey of the Nifty 50 index from 1,000 to 21,000 levels is marked by key milestones, demonstrating its resilience and adaptability to market changes. Here are the significant milestones in its journey:

• 0-1,000 (333 trading sessions): The initial ascent was gradual, with the first 1,000 points taking 333 trading sessions.
• 1,000-2,000 (2,819 trading sessions): The pace picked up significantly after that, with several thousand-point milestones being crossed within shorter timeframes.
• 2,000-3,000 (513 trading sessions): The subsequent ranges, with varying sessions, demonstrate the index's resilience and adaptability to market dynamics.
• 6,000-7,000 (1,608 trading sessions): The period between 6,000 and 7,000 points stands out, requiring 1,608 trading sessions and marking a period of consolidation.
• 9000-10,000 (592 trading sessions): The index took 21 years, eight months and 21 days to reach 10,000 on July 25, 2017, since its inception.
• 20,000-21,000 (60 trading sessions): In just 60 trading sessions, the NIFTY surged from 20,000 to 21,000. It reached a notable milestone by surpassing the 21,000 mark, closing at 20,969.4 with a gain of 68.25 points. This surge comes after the NIFTY experienced a steady climb post-2017, taking slightly over six years to add another 10,000 points, reaching the 20,000 mark on September 11th, 2023.
• On 12 July 2024, the NIFTY50 index hit a new record high of 24,592.20 and closed its weekly expiry at 24,502.15.
  

Major Highs and Lows

The Nifty 50 index has seen several fluctuations over the years, which is not surprising given the dynamic nature of the Indian stock market and its sensitivity to a lot of factors.

Major Gains

Market volatility: From 2020 to 2021, the Nifty50 experienced significant gains. Major surges occurred on April 7, 2020, and February 1 and 2, 2021. These increases are driven by positive developments such as infection numbers peaking and Union budget announcements. After-war effects: On February 15, 2022, the Nifty50 surged by 509.65 points (3.03 percent) following news of Russia withdrawing troops from the Ukraine border.

Major Dips

COVID-19 pandemic (2020-2022): During this period, Nifty experienced significant declines driven by the COVID-19 pandemic. On multiple occasions in March 2020, the index recorded notable drops, with daily losses ranging from 4.90 percent to 12.98 percent. These declines clearly showed widespread market uncertainty and concerns about the pandemic's economic impact.Russia-Ukraine conflict: Nifty witnessed multiple drops during this period. On January 24, 2022, it fell by 468.05 points (2.66 percent) due to rising tensions and inflation concerns. Another drop of 531.95 points (3.06 percent) occurred on February 14, 2022, driven by escalated Russia-Ukraine tensions and other market uncertainties.

Factors affecting Nifty’s movement

Bond yields

Changes in bond yields affect the Nifty. Rising yields can devalue existing bonds, negatively impacting the index, while lower yields can raise bond values, positively affecting the Nifty.

Repo Rates

The Repo rate, set by the RBI, determines the interest rate at which commercial banks borrow money. Alterations in the Repo rate can impact the Nifty by influencing banks' borrowing costs, thus affecting the economy.

Local Economic Factors

Of course, the Nifty 50 is influenced by various local economic indicators, such as the Industry Production Index (IIP), which measures industrial growth. When IIP increases, it can positively impact the Nifty and vice versa.

Global Economic Factors

Global economic trends and events can also impact the Nifty. Due to the interconnectedness of global markets, changes in the S&P 500 or Nikkei indices can influence the Nifty50 index.

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