NSE to launch Nifty Financial Services Index; here's what it will offer

The National Stock Exchange (NSE) will soon launch derivatives on the Nifty Financial Services Index. This index will include financial institutions, banks and insurance.

“Nifty Financial Services Index is a 20 stock Index as against 12 stock Bank Nifty and the constitution is different. While Bank Nifty is fully banks, we here have financial institutions, banks, insurance companies. So, the wide variety of financial sector companies are here," said Ravi Varanasi, Chief Business Development Officer at NSE in interaction with CNBC-TV18.

Giving more details, he said that banks constitute almost 63 percent, while the rest is coming from other sectors that are gaining traction because financial sectors are diversifying.

"We believe that lot of investors would want to hedge their positions. We believe this will give a lot more flexibility to institutional investors and other investors to manage their hedge very effectively," Varanasi said.

“For the initial period, we will waive up the transaction charges so that people can experiment with this product and find a niche for these products in their portfolios," he added.