Nifty 50 vs Nasdaq100

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The Nifty 50

Nifty 50 refers to the fifty most popular large-cap stocks that traded at high valuations in the 1960s and 1970s. Household names like Xerox (XRX), IBM, Polaroid and Coca-Cola (KO) were included in the nifty 50.

Due to their growth and continual progress in dividends, the Nifty Fifty were viewed as “one-decision” investors were advised to buy and never sell.

Many Nifty 50 stacks sported price-to-earnings (P/E) ratios as high as 100 times the earnings. They dominated the bull market of the 1970s, only to come crashing down in the 1973-74 bear market. This particular period was marked by political scandals and rising interest rates and oil prices.

In the year 1996, the Nifty 50 gained an additional meaning in the financial industry. It was referred to as the NIFTY 50 Index in the National Stock exchange of India.

List of Companies

There is no definite list of companies that comprises the Nifty 50, as it was not an official benchmark. These companies commonly share some characteristics like strong balance sheets, global reach and consistent growth. Some of these companies are:

  1. Pfizer (PFE)
  2. Coca-Cola (KO)
  3. Phillip Morris (PM)
  4. General Electric (GE)
  5. Merck (MRK)
  6. Bristol-Myers (BMY)
  7. Johnson & Johnson (JNJ)
  8. Revlon (REV)
  9. The Walt Disney (DIS)
  10. Xerox (XRX)
  11. PepsiCo (PEP)
  12. McDonald’s (MCD)
  13. American Express (AXP)

In February 2008, Wall Street giant UBS devised the New Nifty 50, an expanded version of the list that included international companies such as British Petroleum (BP) and Vodafone Group (VOD). This inclusion of international companies on the New Nifty 50 drew a lot of attention to the solid returns and stability of the companies in the U.K, Japan and some other emerging and growing markets.

Nasdaq

Nasdaq is a global electronic marketplace facilitating the buying and selling of securities. Initially, an acronym for “National Association of Securities Dealers Automated Quotations” it was a subsidiary of the National Association of Securities Dealers (NASD), now known as the Financial Industry Regulatory Authority (FINRA).

Nasdaq was created as a site where investors could trade securities on a computerised, transparent and speedy system. It started its operation on the 8th of February, 1971

The word “Nasdaq” refers to the Nasdaq Composite, an index of more than 3,000 stocks that are listed on the Nasdaq Exchange, including the world’s most technologically advanced biotech giants like Alphabet, Apple, Microsoft, Meta, Intel and Amazon.

Nasdaq Trading Platform

The Nasdaq computerised trading system was originally devised as an alternative to the incompetent specialist system, which later had been the prevalent model for almost a century. The speedy evolution of technology has made Nasdaq’s electronic trading model the standard for all markets globally.

As the sole leader in trading technology from the outset, it was only obvious that the world’s technology giants chose to list on the Nasdaq in their initial days. Since the sector of technology grew and developed in prominence in the 1980s and 1990s, the Nasdaq became the most widely followed proxy for this sector.

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