The Telegraph News : Now You can Trade Round the Clock in Futures

Destination Chicago for key NSE index

OUR SPECIAL CORRESPONDENT

Mumbai, March 10: The Nifty 50 — the benchmark index of the National Stock Exchange — is going to Chicago. The index will now trade on the Chicago Mercantile Exchange (CME). The Nifty 50 is already traded on the Singapore stock exchange. Under a quid pro quo deal with CME Group of the US, investors in India will be able to place their bets on S&P 500 and the Dow Jones Industrial Average (DJIA) — the two premier indices of the US markets. The two indices will list on the NSE. Investors will be able to deal in rupee-denominated futures contracts of the two benchmark indices of the US markets. The NSE today entered into a cross-listing relationship with CME Group. A futures contract is an agreement to buy or sell a particular commodity or a financial instrument at a pre-determined price in the future. In a joint statement today, both the NSE and the CME said the listing and trading arrangements for these indices were subject to regulatory approvals both in India and the US. Market circles said the listing of the Dow Jones and the S&P 500 on the Indian bourses would open up one more option for domestic investors though it might take some time for them to gain popularity. Ravi Narain, managing director and CEO of the NSE, said, “This will improve the portfolio choice for Indian investors by widening the array of assets that they can hold.” The two bourses also entered into a memorandum of understanding with respect to other areas of potential co-operation, including the development and distribution of financial products and services. In a simultaneous move, NSE said it had entered into an MoU with the Singapore bourse to explore listing and trading of more India-linked products to be listed there. It, however, did not provide any details. The NSE’s tie-up with CME and the enhancement of relationship with SGX comes at a time the BSE has been trying to gear up to competition through various means in the recent past.