Launch of Nifty Chemicals Index to Monitor Sector Stocks
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Synopsis
NSE Indices Limited has launched the Nifty Chemicals index to track the performance of leading stocks in the chemical sector. This new index will include 20 top-performing stocks based on market capitalisation and will undergo regular updates to ensure accuracy. It aims to support asset managers and passive investment strategies.
Key Takeaways
- Nifty Chemicals index launched by NSE Indices Limited.
- Tracks performance of top 20 chemical sector stocks.
- Stocks selected based on free-float market capitalisation.
- Weight capped at 33% for individual stocks; 62% for top three.
- Base date set as April 1, 2005, with a value of 1,000.
Mumbai, March 11 (NationPress) - NSE Indices Limited, the subsidiary of the National Stock Exchange (NSE), unveiled a new sectoral index named Nifty Chemicals on Tuesday.
According to an official announcement, this index will monitor the performance of chemical sector stocks drawn from the Nifty 500.
The Nifty Chemicals index will feature the top 20 stocks from the chemical sector, chosen based on their six-month average free-float market capitalisation.
Priority will be given to stocks traded in the derivatives segment of the NSE, the statement elaborated.
The allocation of each stock within the index will be dictated by its free-float market capitalisation. To maintain balance, the weight of any single stock will be capped at 33 per cent, while the cumulative weight of the top three stocks will be restricted to 62 per cent.
The base date for this index is set as April 1, 2005, with a base value of 1,000. This base date is pivotal for tracking variations in index values over time, allowing for meaningful financial and economic comparisons. The index will undergo a semi-annual reconstitution and a quarterly rebalancing to stay current.
This new index aims to act as a benchmark for asset managers and is anticipated to be monitored by passive investment vehicles such as Exchange Traded Funds (ETFs), index funds, and structured products.
Additionally, earlier this month, the exchange announced significant modifications to the expiry days for futures and options (F&O) contracts across multiple indices.
As of April 3, the expiry days for Bank Nifty, FinNifty, Nifty Midcap Select, and Nifty Next50 will shift from the last Thursday of the month to the last Monday.
The NSE circular clarified that if the last Monday is a trading holiday, the expiry will be rescheduled to the previous trading day.
New weekly options contracts will be introduced following the expiry of the respective week’s contract.
The exchange has also moved the expiry days for Nifty’s monthly, quarterly, and half-yearly contracts from Thursday to Monday.
