This is the first time that the exchange has made available weekly futures for the stock index derivatives.
As many as 311 trading members across the country participated in the index derivatives. (File photo)
The National Stock Exchange (NSE) on Monday launched derivatives on the Nifty Financial Services Index, which will give more flexibility to institutional as well as retail investors to manage their hedge. This is the first time that the exchange has made available weekly futures for the stock index derivatives. The first day witnessed volumes of 1.4 lakh contracts being traded worth Rs 511 crore and open interest of 28,219 contracts at the end of the day, the exchange said in a statement.
As many as 311 trading members across the country participated in the index derivatives. At 13.35 pm on Monday, 5,464 contracts had traded in futures and 81,772 contracts had traded in options. The index had witnessed a turnover of over Rs 378 crore at that time. The index consists of 20 stocks and is designed to reflect the behaviour and performance of the Indian financial market, which includes banks, financial institutions, housing finance, insurance companies and other financial services companies.
The financial services space assumes significance as the sector accounts for 33.5 per cent of the Nifty 500 Index. Vikram Limaye, MD and CEO of NSE, said the index derivatives would provide a new risk management tool to investors with exposure to the financial services sector. Currently, the exchange offers index derivatives on only two equity indices — Nifty 50 Index and Nifty Bank Index.
According to recent investment data of foreign portfolio investors (FPIs), 48 per cent of new investment flows were channelised into the financial services sector, which accounted for 35 per cent of the assets under the custody of FPIs, the exchange noted. Further, many of the asset management companies have mutual fund schemes on the financial sector theme.