This underperforming stock has been replaced in Nifty50 index; meet the new entrant!

secures inclusion in the Nifty 50 index by boasting the highest six-month average free-float market capitalization within the eligible universe

Wednesday’s trading session commenced optimistically for the Nifty, but as the day progressed, the index succumbed to volatility, slipping into negative territory and touching a day's low of 21,916. Ultimately, the Nifty settled at 21,951, marking a decline of 247 points or 1.11 per cent.

Caught in a bear trap, the Nifty experienced a decline of over 1 per cent following a period of recent consolidation. However, it managed to defend the crucial 21,950 level on a closing basis, coinciding with the 21-day Exponential Moving Average (EMA) positioned at 21,947, just a day ahead of the monthly expiry of February futures and options contracts.

Selling pressure persisted across sectors, particularly impacting small and midcap stocks. This downward trend was observed in anticipation of the monthly expiry and the forthcoming release of GDP data.

An intriguing development unfolded post-market closure with the announcement of index replacements. The Index Maintenance Sub-Committee (Equity) of NSE Indices Limited has opted to replace certain stocks in various indices as part of its routine review process. These adjustments are slated to take effect from March 28, 2024, at the close of trading on March 27, 2024.

In the Nifty50 index, UPL Ltd., holding a marginal weightage of 0.28 percent, will be replaced by Shriram Finance Ltd. UPL Ltd. is being ousted from the Nifty 50 following its exclusion from the Nifty 100 index, which serves as the parent index for the Nifty 50.

Shriram Finance Ltd. secures inclusion in the Nifty 50 index by boasting the highest six-month average free-float market capitalization within the eligible universe, thereby supplanting UPL Ltd.

UPL's stock witnessed an 11.43 per cent decline over the past month and a 15.55 per cent downturn over the last three months. Meanwhile, Shriram Finance registered a 1.81 percent increase over the preceding month and a notable 19.49 per cent surge over the last three months. UPL has been among the poorest performers in the Nifty 50 index on a year-to-date basis.

Disclaimer: The article is for informational purposes only and not investment advice.