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Charts & Analysis

NIFTY Changes, Stocks In and Out

Three stocks are being replaced in the NSE Nifty, as of October 1.

Going out Coming In
ABB BAJAJ-AUTO
IDEA Dr. Reddy
UNITECH SESAGOA

 

Typically stocks coming in tend to go up as index funds load up on them, but remember that the weightages of these stocks are very small, and the new stocks coming in aren’t going to change the indices a heck of a lot. The sum of the weightages of the stocks going out is just 1.3% of the Nifty today; and that is less than even the weight of TATAPOWER which is 1.31%.

I’m long some of the “Coming in” stocks, before I even knew of the change – but it may be worth taking a position in them just in case.

  • Anonymous says:

    >See i told ya that nse just needed to kick mobile companies out and they did it!!!!!!!!

    Just like accountant cook the books.

  • sjdate says:

    >The co's going out are from engg, telecom, & construction sector. The co's entering are from Auto, Pharma, and metals sector. Don't they consider due representation to sectors when selecting co's in the index ? I am not aware of the selection process, hence perhaps this naieve question.
    Incidentally a lot of proponents of passive Index ETF investing say that no fund manager can beat the index ETF cosistently. No body has answered my querry " companies comprising the indx are selected by a set of experts from the NSE or BSE. The Funds also have their own set of experts who decide the companies they will invest in. How come one set of experts will be consistently better that the other set ?"

  • Anonymous says:

    >@sjdate I think when people talk about index investing, they are mainly focusing on the passiveness of the process. Basically you buy and hold good companies and you buy periodically in smaller quantities. However, Most mutual funds are actively managed, so the fund manager tries to time the market many times, this churn kills so much money due to brokerage fees and STT etc.