Sebi prompts bourses to consider capping sectoral weightage in indices

Bourses have sought feedback on capping of sectoral weight in indices; rising weightage of financial sector questioned

The Securities and Exchange Board of India (Sebi) nudged stock exchanges to consider capping sectoral weightage in their benchmark indices, said people with the direct knowledge of the development.

Last week, both the National Stock Exchange (NSE) and the BSE floated consultation papers, seeking feedback from the market on whether to restrict the weightage of the top sector in the benchmark indices to as low as 25 per cent.  

People with knowledge of the matter said the market regulator is concerned over the financial sector’s growing weight in the premier indices, amid turbulence in financial stocks following the default in IL&FS. 

In addition,