From January 11, 2021, NSE to Launch Derivatives on Nifty Financial Services

The National Stock Exchange (NSE) on Thursday state that it will introduce derivatives on the Nifty Financial Services Index from January 11, 2021. The exchange market has already received approval from capital market regulator Security and Exchange Board of India (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 added in its statement.

By claiming a better outcome, 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. It is further added that the index has registered annualized returns of 15% in the past five years.

According to the recent report on investment data of Foreign Portfolio Investors (FPIs), 48% of new investment flows were channelized into the financial services sector. It was also mentioned that the sector calculated for 35% of the assets under the custody of FPIs, the exchanges stated. Many of the asset management companies have mutual fund schemes on the financial sector theme.

The financial service space predicted reliable effect, as the sector accounts for 33.5% of the Nifty 500 index. The financial services index includes of 20 stocks and it is designed to reflect the behavior and performance of the Indian financial market, which cover the sector like banking, financial institutions, housing finance sector, insurance sector or companies and other financial services companies.

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