NSE to launch derivatives in F&O segment on Nifty Financial Services Index

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December 12, 2020 5:00 AM

NSE on Thursday said that the financial services sector assumes significance as it accounts for 33.5% of the Nifty 500 index.

ICICI Securities estimates that the changes could result in Rs 760 crore worth of buying of Tata Consumer shares.

The National Stock Exchange has an approval from the Securities and Exchange Board of India (Sebi) to launch derivatives in the futures and options segment on the Nifty Financial Services Index. This is the third index which has its own equity derivatives, the other two are Nifty Bank and Nifty. Derivatives on the Nifty Financial Services Index will be launched from January 11, 2021.

NSE on Thursday said that the financial services sector assumes significance as it accounts for 33.5% of the Nifty 500 index. The Nifty Financial Services Index comprises of 20 stocks and is designed to reflect the behaviour and performance of the Indian financial services market which includes banks, financial institutions, housing finance, insurance companies and other financial services companies.

Additionally, the bourse noted that in recent investment data, 48% of the new investment by foreign portfolio investors (FPIs) have been channeled towards the financial services sector. The sector accounted for 35% of the assets under the custody of FPIs. Many of the asset management companies have mutual fund schemes on the financial sector theme.

The exchange said, “The Nifty Financial Services index has a 94% correlation and a beta value of 1.2 with the Nifty 50 Index. It has a correlation of 98% with the Nifty Bank index. The Nifty Financial Services index has delivered annualised returns of 14.99% in the last five years.”

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