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Index reconstitution

Index reconstitution is the periodic review that adds or removes stocks from benchmarks like Nifty or Sensex.

NSE Indices and BSE announce reconstitution schedules and methodology criteria.

Passive funds tracking an index must realign holdings around the effective date.

Inclusion or exclusion can create temporary demand or supply in the affected stocks.

Free-float market cap, liquidity, and listing history are common selection inputs.

Part of the Market Pulse Term of the Day series — factual market vocabulary, not investment advice.