Mumbai: NSE Indices Limited, a subsidiary of the National Stock Exchange (NSE), on Tuesday introduced a new sectoral index called Nifty Chemicals.

The index will track the performance of chemical sector stocks from the Nifty 500, according to an official statement.

The Nifty Chemicals index will include the top 20 stocks from the chemical sector, selected based on their six-month average free-float market capitalisation.

Stocks available for trading in the derivatives segment of NSE will be given preference, the statement added.

The weight of each stock in the index will be determined by its free-float market capitalisation. To ensure balance, an individual stock’s weight will be capped at 33 per cent, while the combined weight of the top three stocks will be limited to 62 per cent.

The base date for this index has been set as April 1, 2005, with a base value of 1,000. In financial indices, the base date serves as a reference point for tracking changes in index values over time.

It is crucial for making meaningful comparisons in financial and economic analysis. The index will undergo a semi-annual reconstitution and a quarterly rebalancing to keep it updated.

This new index is expected to serve as a benchmark for asset managers and will likely be tracked by passive investment funds, such as Exchange Traded Funds (ETFs), index funds, and structured products.

Meanwhile, in the starting of the month, the exchange has announced a major change in the expiry days for futures and options (F&O) contracts of several indices.

Starting April 3, the expiry days for Bank Nifty, FinNifty, Nifty Midcap Select, and Nifty Next50 will move from the last Thursday of the month to the last Monday of the expiry month.

The NSE circular stated that if the last Monday is a trading holiday, the expiry will be shifted to the previous trading day.

Additionally, new weekly options contracts will be introduced after the expiry of the respective week's contract.

The exchange has also shifted the expiry days for Nifty’s monthly, quarterly, and half-yearly contracts from Thursday to Monday.