American investors can access the Indian stock markets as trading of Nifty Futures on the Chicago Mercantile Exchange (CME) will start from July 19.
The CME will be introducing two new contracts -- E-mini and E-micro S&P CNX Nifty (Nifty 50) Futures -- designed to access the domestic market opportunities, the National Stock EXchange (NSE) said in a statement today.
Investors would be able to trade for nearly 23 hours on the CME Globex. These hours include the market hours in India (except the last one hour before the Indian market opens).
"The introduction of these two new contracts will make the Nifty 50 available to a much larger community of traders and investors across various exchanges and time zones. This will also go a long way in realising our vision of making Indian financial products available globally," NSE Chief Executive and Managing Director Ravi Narain said.
These two new contracts are intended to give investors a more efficient means to gain exposure to India-related asset classes, the NSE said, adding the investors can also trade the contracts to hedge their risks from existing exposure to the domestic stock market.
In March, the NSE and CME had entered into a cross-listing apct including licences covering benchmark indexes for the US and Indian equities. Under the cross-listing pact, the S&P CNX Nifty Index (Nifty 50), accounting for 22 sectors of the domestic economy, has been made available to CME for the creation and listing of the US dollar-denominated futures contracts for trading on the CME.
The licence to the Nifty 50 from NSE's affiliate India Index Services & Products which is exclusive to the CME Group within the Americas and Europe, is in addition to the existing licensing arrangement between Singapore Exchange and IISL.
The contract size of E-mini contracts will be $10 into the value of the Nifty index on that day and the E-micro contracts will be $2 into the value of the Nifty index on NSE on that day. These contracts will be traded on the CME Globex, providing access to participants around the world.
Further, CME and SGX are extending their existing mutual offset arrangement to include the Nifty Futures contract whereby investors can initiate a position on the CME or SGX and offset it at the other exchange, the NSE added.
Yesterday, the Bombay Stock Exchange announced the launch of Sensex Futures and Options on the Eurex--the Frankfurt- based derivatives bourse--from October 4.
