I want to calculate the NSE Nifty 50 index on my own. It is a free floating index. The method I am following is
- I have a base value of index ie ( for all stocks, sum of [price_of_stock * floating_shares_of_stock]) for all the constituents at the time of introduction of index, which represents 1000 index value. Let's call it base price value. This value as per my calculations is approximately Rs 444555077 ie. 11114321495493 / 25001
- Now, calculate current_val which is (for all stocks, sum of [price_of_stock * floating_shares_of_stock]).
- Current Index = current_val/444555077.
But sometimes index that I calculate by above methodology differs from what exchange publishes on either Yahoo or Google finance.
Also I want to know if floating shares for the stocks could change on a daily basis and if it would change how the index value is affected.