NSE’s index services subsidiary, NSE Indices Limited today launched a new sectoral index – Nifty Chemicals.

The Nifty Chemicals Index aims to track the performance of stocks from the Nifty 500 that form a part of the Chemicals sector. The top 20 stocks based on 6-month average free float market capitalization are selected with a preference to stocks available for trading in the derivatives segment at NSE.

The weight of each stock in the index is based on free float market capitalization. The weight of each stock in the index is capped at 33% and the weight of top 3 stocks is capped at 62%.

The base date for the index is April 01, 2005, and the base value is 1000. The index will be reconstituted semi-annually and rebalanced on a quarterly basis.

The new index is expected to act as a benchmark for asset managers and be a reference index tracked by passive funds in the form of Exchange Traded Funds (ETFs), index funds and structured products.