Cse Brokers Gaga Over Nse-50 Index

With more and more members of the Calcutta Stock Exchange (CSE) shifting to arbitrage with players on the National Stock Exchange (NSE), 'Nifty' "" the 50-scrip NSE index "" is the latest buzzword at the bourse.

The index is gaining popularity among market operators and analysts since NSE began the on-line computation of the index from July this year. With this, the index will get updated to the decimal every second.

The Unit Trust of India plans to base the country's first derivative index-linked fund on the NSE-50 index. According to Dharmesh Rajdev, analyst, this alone could push NSE-50's popularity in Calcutta. According to a section of Calcutta brokers, popularity of the decade-old Sensitive Index of the Bombay Stock Exchange (BSE) outside Mumbai is gradually diminishing. Another section, however, disagree with saying that the Sensex is still the best.

The brokers attribute the Sensex's declining popularity to late arrival of the index. While the Sensex is available only in the evening, NSE-50 is easily accessible as the NSE terminals are spread all over the country, said Rajesh Pachisia, director, SKP Brokerage, who is a member of CSE and NSE.

According to rough estimates, there are more than 100 NSE members in Calcutta whereas the NSE terminals exceed 200 in number.

Nifty is becoming a better barometer from technical point of view for market analysts. It is more representative of market as the scrips are widely held, and its has a better market capitalisation, Pachisia said.

The NSE authorities have scientifically derived a model and have worked out the impact cost, the percentage rise/fall in the cost of acquiring certain number of shares in a particular company, at the prevailing market scenario. Hence, it reflects the market trend more effectively, he said.

Besides, one has to take into consideration the cost factor (which is equivalent to the phone call charges between Calcutta and Mumbai) if one needs to know Sensex figures in the middle of a trading session. High cost is not favoured in depressed market conditions, said another CSE broker. BSE loyalists like Vivek Mahajan, a leading market analyst, however, dispute this view and said Sensex remains crucial and is still taken into account by market analysts.

It is more out of habit as people still have the concept of the Sensex than for its actual representative value, said Dharmesh Rajdev, a market analyst.

Till the expansion plans of BSE under the stewardship of M G Damani materialise and BOLT terminals are available across the country, Nifty will rule over the Sensex, at least outside Mumbai.

If bourses of the country join BOLT, the on-line trading system that has taken the western Indian commercial capital generations one step ahead in stock trading, price corelation between the new BSE-30 and NSE-50 will be the same, an official at CSE said.