Nifty Calculator – A Bull Market Correction or Bear Market ?

There is a lot of noise around how a Bear Market has started and how to navigate it. We covered this in detail in our recent webinar ( Can pay and watch on NooreshTech App)

Whatever be your view – Do try putting in the numbers for at least the top 20 names in Nifty50 and get a guesstimate.

For all the super bullish and bearish readers.  please send me a  guesstimate sheet which takes it to 12500/14500 and 18500/20500.

This is a good time for the exercise. Can mail me on nooreshtech@analyseindia.com

NIFTY CALCULATOR May 2022

Do check this video on Nifty Calculator - https://www.youtube.com/watch?v=QbmhiLXYx2k

What is a Nifty Calculator?

-> As per the weightage given by NSE for Nifty stocks we have created the Nifty Calculator.

-> Change the expected price and the expected Nifty will change accordingly

-> Create 3 different sheets for yourself–

Pessimistic (where you put the worst possible prices you think. Default 10% down)

Optimistic (the best prices possible. Default 10% up)

Neutral/Rational/Technical / Fundamental (prices on any reasoning)

Please Note as weights change every day by a small margin this will not give an accurate estimate but will be approximate.

How to Guess?

• Everyone has a view on Nifty based on Macro, PE, Valuations, Technicals, Waves, etc. Try to grill it down to the constituents. It should be a reflection of your actual guesstimate.
• Just estimating wild scenarios on the top 20 stocks is enough given the 75-80% weight.
• Start with changing the default fall to 5-10-15-20-40-80 or rise to 5-10-20-40-80.
• Then change stocks that you think may not do the default move.
• Also do remember there is not a direct correlation between the economy with the Nifty.

Things to Note

• One of the reasons we keep posting this is to make an actual unbiased guess every month/quarter.
• There have been numerous warnings as to how markets are overheated. Understanding the constituents allows you to realize how Nifty is not supposed to reflect the Economy.
• Nifty is now at the middle from a recent low of 16400 and 18600 the highs.
• Putting in the numbers looks like we are going to stay sideways for some time. What’s your call?

Interesting Observations

• Top 5 stocks – Reliance, Infosys, HDFC Bank, ICICI Bank, HDFC, = 41.43% of Nifty.
• Top 10 stocks constitute 58.87% of the Nifty
• Top 20 stocks constitute 77.01% of the Nifty
• Reliance is the top weight at 12.51%, followed by HDFC Bank at 8.38%. 20.89 %+ of the Index.
• Reliance + HDFC Twins = 26.64% of Nifty (Hope you get why Nifty does not depict GDP. 25% of India’s GDP is not equal to Reliance +HDFC)
• HDFC Twins together constitute 14.13% of Nifty (reducing now for some time)
• Bottom 24 stocks have less than 1% weight and total weight at 16.49%

Sectoral Observations

 Sector May-22 Mar-22 Feb-22 Jan-22 Dec-21 Aug-21 Jun-21 May-21 Apr-21 Jan-21 Dec-20 Jul-20 May-20 Apr-20 Mar-20 Oct-19 FINANCIAL SERVICES 35.66 35.19 36.17 36.72 35.61 37.58 37.2 38.06 37.81 38.12 38.78 33.16 33.34 36.19 36.51 39.48 Information Technology 15.88 18.18 17.67 17.5 19.09 18.02 17.43 16.15 16.53 17.13 16.28 16.11 14.66 14.48 15.04 13.01 CONSUMER DURABLES 3.05 3.2 Fast Moving Consumer Goods 8.24 7.18 10.61 10.39 10.78 11.06 11.09 11.02 11.1 11.06 11.53 12.64 13.41 13.08 14.46 12.39 Oil, Gas & Consumable Fuels 14.26 13.62 12.74 12.61 12.31 11.39 11.68 12.04 11.79 11.99 12.49 16.18 14.29 13.92 12.45 15.30 AUTOMOBILE AND AUTO COMPONENTS 5.64 4.8 5.22 5.42 4.96 4.57 5.34 5.34 5.23 5.91 5.39 5.61 5.55 5.00 4.54 6.11 Telecommunication 2.28 2.33 2.21 2.27 2.13 2.11 1.82 1.92 2.05 2.26 2.03 3.20 3.59 3.16 3.13 1.78 CONSTRUCTION 2.75 2.79 2.99 3.04 3.02 2.72 2.66 2.63 2.56 2.74 2.61 2.38 2.89 2.70 2.79 3.72 Healthcare 3.91 3.99 3.3 3.2 3.42 3.46 3.58 3.54 3.66 3.47 3.61 3.18 3.35 3.11 2.72 2.15 Metals & Mining 2.75 3.4 3.79 3.34 3.34 3.76 3.56 3.63 3.65 2.38 2.50 2.15 2.70 2.62 2.52 2.93 POWER 2.12 1.81 1.83 1.86 1.7 1.55 1.68 1.64 1.66 1.53 1.61 1.88 2.20 2.13 2.26 CONSTRUCTION MATERIALS 2.12 2.24 2.29 2.39 2.43 2.5 2.53 2.53 2.59 2.27 2.15 2.17 2.41 2.12 2.22 1.50 SERVICES 0.73 0.73 0.71 0.69 0.71 0.74 0.76 0.84 0.84 0.63 0.59 0.51 0.63 0.55 0.54 0.64 CHEMICALS 0.59 0.55 0.5 0.56 0.54 0.55 0.64 0.67 0.53 0.52 0.43 0.56 0.56 0.56 0.50 0.67 MEDIA & ENTERTAINMENT 0 0 0 0 0 0 0 0 0 0.00 0.27 0.42 0.35 0.32 0.33

Some notable changes :

1. Consumer goods sector is now divided into Consumer Durables and FMCG.
2. 'Oil and Gas' now renamed as 'Oil, Gas and consumable fuels'. Coal India now classified under Oil, Gas and Consumable fuels. Earlier it was classified under metals. IOC out from index which was classified under Oil and Gas
3. 'Automobile' Sector renamed as 'Automobile and Auto Components'.
4. 'Metals' renamed as 'Metals and Mining'. Coal India no longer classified under this sector.
5. 'Cement and  Cement Products' sector renamed as 'Construction Material'.
6. 'Pharma' sector renamed as 'Healthcare' and Apollo hospital is included in the index under this sector.
7. 'Fertilizers and Pesticides' sector renamed as 'Chemicals'.

Weightage Changes

• Banks and Financials are now reduced to 35-37% from 37-38% a few months back. It has seen a bottom of 33.16 in July 2020.
• Power at just 2.12%. Media at 0.
• Oil and Gas from 16.18% in July 2020 to 14.26%. 'Oil and Gas' is now renamed as 'Oil, Gas and Consumable fuels'. Coal India is now classified under Oil, Gas, and Consumable fuels. Earlier it was classified under Metals. IOC out from the index which was classified under Oil and Gas.
• Metals from 3.79% in Feb 22 to now back to 2.75% . Coal India is now classified under ‘Oil, Gas and Consumable Fuels’. Earlier it was under Metals.
• IT weights increased from 14.48% in April 2020 to 19.09% in Dec 2021. Its weight reduced from 19.09% in December 2021 to 15.88% in May 2022.
• Automobile sees an increase after a long time. Now at 5.64%

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