NSE Indices launches Nifty Chemicals
Nifty Chemicals is the newest addition to the sectoral indices. It has been launched by NSE Indices Limited, a wholly-owned subsidiary of the National Stock Exchange (NSE). The index is to act as a benchmark for asset managers and serve as a reference for passive investment products such as Exchange-Traded Funds (ETFs), structured products, and index funds.
The index would provide a structured approach to track the performance of the chemical sector stocks within the Nifty 500 and would include the top 20 stocks from the chemical sector.
Key Points About Nifty Chemicals
- The stocks for Nifty Chemicals would be selected on the basis of their six-month average free float market capitalisation.
- The stocks that are available for derivatives trading on the NSE would be preferred.
- The stock’s weight would be determined by free float market capitalisation, with a cap of 33% on individual stocks.
- There would be a 62% cap on the top three stocks combined to ensure diversification.
- The base date would be April 1, 2005.
- The base value would be 1,000.
- Nifty Chemicals would be reconstituted on a semi-annual basis to include updated stock selection.
- Nifty Chemicals is to be rebalanced on a quarterly basis.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.