NSE plans derivative contracts linked to European indices

The National Stock Exchange (NSE) is looking to launch derivative contracts linked to European indices, which will help domestic investors to have exposure to European equity market.

The bourse last month launched derivative contracts linked to the American equity indices -- Dow Jones Industrial Average (DJIA) and S&P 500.

NSE Senior Vice-President R Sundararaman said the bourse was in discussions [with various players] to start derivative contracts on European indices.

"We hope to launch the Europen indices in the same lines as we did with S&P 500 and DJIA," Sundararaman said.

Key European indices include the UK's FTSE 100, Germany's Dax and France's CAC 40.

In July last year, NSE had entered into a pact with the London Stock Exchange (LSE) to evaluate options of cross-listing of their key indices on each other's platforms.

As per the agreement, the two exchanges would explore the feasibility of FTSE Group licensing the FTSE 100 index to the NSE and the Indian bourse licensing its benchmark Nifty-50 to LSEG for trading purposes.

The derivative contracts on DJIA and S&P 500 was the first that such contracts on global indices were launched in India. The new contracts includes futures on both the indices and  and options on the S&P 500.

Since their launch on August 29, the derivative contracts on DJIA and S&P 500 have been seeing daily average of about 4,000 contracts, according to the NSE.

These rupee-denominated derivative contracts would help Indian investors to have exposure to the American equity market.

NSE is the fourth-largest exchange in the world and also the second largest derivatives exchange in Asia.