BSE Shares Surge After Launching 3 New Indices: Sensex Sixty, Sixty 65:35, Power & Energy

With the launch of three new indices today—BSE Sensex Sixty 65:35, BSE Sensex Sixty, and BSE Power and Energy—by its subsidiary, Asia Index Pvt. Ltd., BSE shares enjoyed a massive five-day winning run that culminated in a lifetime high. Even after hitting this point, the stock fell later in the day, capping the rise at about 6% in a single day.

What additional indicators does BSE's subsidiary offer?

The purpose of the recently introduced indexes is to offer new options and to diversify investing techniques. They can be specifically used to the benchmarking of mutual fund schemes, other fund portfolios, and Portfolio Management Services (PMS) methods. In addition, they support passive methods like Index Funds and Exchange-Traded Funds (ETFs) and act as a barometer for the success of businesses in their industry.

1. The BSE Sensex 60:

Comprising components from the BSE Sensex and the Next 30, the BSE Sensex Sixty is sorted according to free-float market capitalization. Its starting value date is June 23, 2014, and its base value is $10,000. It is reconstitution semi-annually and rebalanced quarterly. There is also a USD version of it.

2. BSE Sensex Sixty 65:35: 

This strategy index, which consists of 60 equities, represents the BSE Sensex and BSE Sensex Next 30 components in a 65:35 ratios. If you compare this ratio to the conventional free-float market capitalization strategy, you will see a greater exposure to the Next 30. When combined, these 60 stocks account for more than 55% of the value of the free-float market in India.

3. BSE Power and Energy: 

The BSE 500's energy and utility firms are the subject of the BSE Power and Energy thematic index. It was first established on December 31, 2013, and its base value is set at 1,000. The index, which is rebalanced every quarter, caps the weight of any stock at 15%. There is also a USD version of it.

What Effect Will It Have? & Prospects for the Future

On the strength of this announcement, shares of BSE Ltd. rose 3.7% to an all-time high of Rs.4,260 per share before plunging roughly 6% to Rs.3,863. In the morning, the Nifty 50 fell by 0.4% and the stock fell 3% to Rs. 3,983.50. BSE shares have increased 75.3% so far this year, and they have increased 179.8% over the last twelve months. With an average 12-month downside of 22.4%, four of the seven analysts tracking the stock have a "buy" rating, two advise "hold," and one indicates "sell."

Benefit of these New Arms?

An exchange filing states that these indexes can be utilized to benchmark fund portfolios, MF schemes, and PMS strategies. According to the report, they may also be used to monitor the performance of businesses in the aforementioned sectors and to operate passive strategies like index funds and exchange-traded funds (ETFs). "Investors can now access a broader spectrum of market opportunities, further enriching their investment s strategies with the latest additions to BSE's suite of indices," the filing stated.

In conclusion

All in all, the launch of these three indexes indicates BSE’s ambition to broaden investment opportunities, giving more strategic and diverse goods for the Indian market. Despite the volatility in its stock price, the move represents a step towards improving investment frameworks, both locally and globally.