2020 has been a volatile year for the markets. The Nifty50 index has not only witnessed massive volatility this year but also fluctuation in weights of various sectors in the index. Brokerage house Motilal Oswal highlighted these changes in a recent report.
Although Nifty has witnessed significant volatility over the past quarter, it has recovered considerably from March 2020 lows and has managed to reclaim the psychological levels of 10,000.
According to MOSL, the IT sector has seen the highest increase in weightage in this year. It has risen 400 bps to 16.8 percent in September 2020 from 12.8 percent in December 2020. The Nifty IT index has also surged 33 percent in 2020 (YTD).
However, BFSI’s (Public, Private, NBFCs and Insurance) weightage fell the most in this period, down 870 bps to 33.3 percent from 42 percent in December 2019 end.
Among stocks, Reliance Industries continued to claim the top weightage in Nifty and increase its weight sharply in the index. The weight of the stock in Nifty rose from 9.8 percent in December 2010 to 14.9 percent in September 2020, the report added.
This single stock lifted the oil and gas sector's weight in the index to 16.7 percent from 12.5 percent in December 2019.
The report also stated that consumer’s weight in the Nifty remained stable despite severe underperformance by ITC over the last six years due to the inclusion of more consumer companies in the benchmark.
The Auto sector also remained in this period despite a major lack in demand in the sector due to the coronavirus-led lockdown.
However, the pandemic has almost doubled the weight of the healthcare stocks in the index to 4 percent currently from 2.1 percent in December 2019. However, it is still down from 7.3 percent seen in December 2015.
Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
(Edited by : Abhishek Jha)
First Published: IST