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NSE to launch derivatives on Nifty Financial Services Index from January 11

The exchange has already received an approval from markets regulator Sebi to launch derivatives on the index.

NSE to launch derivatives on Nifty Financial Services Index from January 11
In its order passed on December 11, SAT has stayed the penalty levied by Sebi on NSE.

The National Stock Exchange (NSE) on Thursday said it will launch derivatives on the Nifty Financial Services Index from January 11, 2021. The exchange has already received an approval from markets regulator Sebi to launch derivatives on the index. Currently, it offers index derivatives on only two equity indices — Nifty 50 Index and Nifty Bank Index, the NSE said in a statement.

The financial services space assumes significance, as the sector accounts for 33.5 per cent of the Nifty 500 Index. The Nifty Financial Services 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 index has delivered annualised returns of 15 per cent in the past five years. The NSE said it will offer futures and options in seven serial weekly, excluding the monthly expiry and three serial monthly contracts. This is the first time that the exchange will make available weekly futures for the stock index derivatives.

According to recent investment data of foreign portfolio investors (FPIs), 48 per cent of new investment flows were channelised into the financial services sector. The sector 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.

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