Nifty peaks on new entrants

Top 5 losers

Sensex

Reliance Ind264.75Infosys Tech-235.23 Tata Steel99.35Bajaj Auto-90.49 Bharti Airtel88.20Tata Motors-89.23 SBI59.30Ambuja Cement-51.57 ONGC33.80ACC-46.45  Nifty Nifty Reliance Ind89.10Infosys Tech-43.69 Bharti Airtel21.35Wipro-33.29 Tata Steel15.80TCS-20.31 SBI12.62Bajaj Auto-18.19 ONGC6.80Tata Motors-15.15 *Note: Gainers/losers means increase/decline in contribution between  Though the 29 Sensex components had 80 per cent weightage in the Nifty, while the Nifty hit a new peak on May 21, the Sensex was 235 points away from its peak. The Nifty peaking on May 21 was made possible because of the contributions of the two new entrants compared with the expelled Jet Airways and Oriental Bank.  The two outgoing components of the Nifty had contributed only 24.33 points on February 8 and just 20 points on April 3, the day before they exited from the Nifty. Whereas the two new entrants contributed 114.6 points on April 4, and increased their contribution by 34.9 points to 149.49 points on May 21.  The Nifty, while reaching its new all time high of 4260 on May 21, had gained only 36.65 points from the 4224.25 levels on February 8. This means almost the entire rise was largely owing to the two new entrants.  With less than a per cent weightage for Jet Airways and Oriental Bank, their contributions would have not gone up despite the 25 per cent (Rs 2,413 crore) increase in market capitalisation recorded by the two since their exit from the Nifty.  On the contrary, the market capitalisation of the two new entrants stood at Rs 17,562 crore in the Nifty on account of the 30 per cent increase in their market prices after entering the Nifty.  The study shows that the contribution of 29 components in both the Sensex and the Nifty have declined between February 8, when the Sensex hit its all time high, and May 21, when the Nifty peaked. The Sensex, which is a free float index, declined by 1.87 per cent, while the Nifty, the full market capitalisation index, declined 2.28 per cent between the said period.  The weightage of components in the Sensex and the Nifty differs because of the different methodologies used in compiling indices. However, when the market prices of index heavyweights declines or goes up substantially, the impact on indices in both methodologies remained more or less unchanged.  For example, the weightage of Infosys Technologies in the Sensex declined from 11.82 per cent on February 8 to 10.38 per cent on May 21, on account of 18.01 per cent decline in the market price of Infosys.  This price decline pulled down Infosys contribution to the Sensex by 235.23 points, from 1731.88 on February 8 to 1496.65 points on May 21.  The weightage of Infosys in the Nifty during the said period fell from 6.21 per cent to 5.13 per cent, and its contribution declined by 43.69 per cent. The Nifty and the Sensex, based on 29 common components, have declined by 269.59 points and 80.07 points, respectively, between February 8 and May 21.  This suggests that irrespective of the different methodologies used for compiling indices, Infosys Technologies had pulled down both the Sensex and the Nifty.