Major Milestones: Nifty from 1,000 to 11,000

Publish Date: August 29, 2018

The NSE Nifty, an index made up of top 50 companies, became popular due to the rapid nationwide expansion of the National Stock Exchange in the 1990s. In no time, NSE became the largest stock exchange in India surpassing a century old Bombay Stock Exchange.

The Nifty breached the 11,000 mark this year for the first time. This was after an International Monetary Fund (IMF) report showed that India was set to be the world’s fastest growing economy in 2018-19.

The Nifty was introduced by the National Stock Exchange (NSE) on 3rd November 1995. Its base value was 1,000. Nifty crossed some interesting milestones in its journey from 1,000 to 11,000 points.

Milestones

• Nifty at 1,000: The index was launched in 1995 with a base value of 1,000.
• Nifty at 1,800: On the back of information technology sector boom, Nifty touched the 1,800 mark for the first time in 2000.
• Nifty at 3,000: With strong growth in the Indian services sector, Nifty zoomed past the 3,000 mark in 2006.
• Nifty at 5,000: Thanks to the rise in India’s GDP, Nifty sailed to 5,000 in 2007.
• Nifty at 7,000: Nifty touched 7,000 after the Narendra Modi-led National Democratic Alliance formed a stable government in the Centre in 2014.
• Nifty at 9,000: In 2017, Nifty spurred to the 9,000-mark backed by strong buying from foreign investors.
• Nifty at 10,000: The broader market index breached the 10,000 mark in 2017 on the back of good monsoon, strong corporate earnings and the rollout of Goods and Services Tax (GST).
• Nifty at 11,000: Nifty hit the record high of 11,000 in 2018 because of fall in US crude oil prices and the World Bank’s positive update on Indian economy.

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Indian economy was in a boom phase from the year 2003 till the tempo was disrupted in 2008 by the global financial crisis. However, India regained its strength faster than most economies of the world. Recently, the market has gained momentum again due to the introduction of GST in 2017.

It is all about patience

People, mostly new investors, are often wary of investing in equities because of the risk associated with it. Yes, there will be downsides but in the long run, it will prove to be a positive run.

For example, Nifty fell from 6,000 in January 2008 to around 2,500 points in October 2008 – a fall of over 50% in eight months. However, it regained all that it lost and crossed 7,000 in 2014. Thus, there are ups and downs but the market marches ahead in the long-run.

One must understand that investing and trading are two different things. Investing is a buy-and-hold process, which is intended towards gradually building wealth over a period of time. Trading, on the other hand, is a process involving more frequent buying and selling of stocks.

For better returns, a smart investor must choose to invest in good stocks with a long-term perspective. Stocks must be carefully selected, and an investor must wait for the right time to invest. People often misconceive a market downside to be bad. However, such periods could be a good time to start investing in stocks that were out of your budget earlier. When people start investing, the price of the stocks rises thus regaining market confidence.

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