To put in place an overall gauge for the Indian stock market, a new S&P BSE Allcap Index was announced today that would cover over 700 listed stocks representing over 95 per cent of market capitalisation.
Asia Index Private Limited, a joint venture between S&P Dow Jones Indices and BSE Ltd, said the new Index Family would be launched in the second quarter of 2015 to put in place "a broad benchmark index that will help measure the performance of the Indian equity market".
The new Index will further be divided into five size- based indices including LargeCap, MidCap and SmallCap using total market capitalisation, and ten sector-based sub-indices. Certain existing indices will be replaced by the new ones.
The S&P BSE AllCap Index will be useful for broad market measurement, while the five size-based indices and ten sector indices will offer investors a tool to analyse market movements across size or sectors.
"The Indian equity market has been one of the top performers among emerging economies. Hence, there is a strong need to effectively measure its performance across sectors and market segments that can truly represent its breadth and depth," Asia Index Private Limited CEO Alka Banerjee said.
All 16 indices will be calculated in Indian rupees as wellas in the US dollars to help foreign investors to measure market performance after incorporating exchange rates.
"We are excited to launch the entire suite of indices under the S&P BSE AllCap Index. Investors in India, and globally alike, want a diversified way of measuring market movements which has a wider coverage of companies that is in line with global practices," BSE CEO Ashish Chauhan said.
The five size-based indices would include S&P BSE LargeCap, S&P BSE MidCap, S&P BSE Large MidCap, S&P BSE SmallCap and S&P BSE MidSmallCap.
The 10 sector indices to be launched are S&P BSE Indices for for Basic Materials, Consumer Discretionary Goods & Services, Energy, Finance, FMCG (Fast Moving Consumer Goods), Healthcare, Industrials, Information Technology, Telecom and Utilities.
The existing S&P BSE indices for Midcap, Small cap, healthcare, IT and FMCG would be replaced with new indices, which would provide a better representation of these industries with respect to size and sector.
