BSE Index Services has introduced a new benchmark designed to capture the performance of India's derivative-eligible equity universe. The BSE All Derivative Stocks Index tracks stocks within the BSE 500 that are linked to derivative trading, reflecting the growing depth and liquidity of the country's equity derivatives market.

Index Structure and Methodology

The new index employs a sophisticated weighting methodology that combines multiple factors to ensure balanced representation:

Constituents are selected from the BSE 500 universe based on their derivative trading eligibility, with weights determined through a combination of float-adjusted market capitalisation and momentum scoring. The 10% individual stock weight cap ensures diversification and prevents excessive concentration in any single security.

Market Applications and Investment Use Cases

The BSE All Derivative Stocks Index offers multiple applications for market participants and investors:

• Passive Investment Strategies: Exchange-traded funds (ETFs) and index funds
• Benchmark Services: Portfolio management services (PMS) and mutual fund schemes
• Investment Portfolios: Broader market exposure through derivative-eligible stocks

According to Ashutosh Singh, Managing Director and CEO of BSE Index Services Pvt. Ltd., the index represents a structural shift in benchmark construction. "By dynamically representing the entire derivative-eligible equity universe, the index mirrors the changing depth, liquidity and maturity of India's capital markets," Singh explained.

Strategic Market Positioning

The launch addresses the evolving needs of India's capital markets by providing a transparent, rules-based benchmark that adapts alongside the derivatives ecosystem. The index enables investors to access a broader spectrum of market opportunities while maintaining systematic exposure to stocks with active derivative trading.

BSE Index Services Pvt Ltd, formerly Asia Index Pvt Ltd, manages the calculation, publication, and maintenance of various equity indices. As Asia's oldest stock exchange, BSE continues to innovate in index construction while maintaining its position as home to the benchmark Sensex index, which recently celebrated 40 years since its launch.

Indian equity markets endured a brutal week of selling that culminated on Friday, January 9, marking the worst weekly performance since September. The five-day sell-off wiped out ₹15 lakh crore from the market capitalisation of BSE -listed companies, with Friday alone accounting for ₹6 lakh crore in losses.

Nifty 50 Hits Two-Month Low

The benchmark Nifty 50 index tumbled to its lowest level in two months as selling pressure intensified across the board. The week's performance was particularly damaging, with 35 out of 50 index constituents ending in the red.

Banking Giant HDFC Bank Leads Decline

HDFC Bank emerged as the biggest casualty among heavyweight stocks, posting its worst weekly performance since January 2024. The banking giant alone shed over ₹1 lakh crore in market capitalisation during the week, highlighting the severity of the sell-off in financial stocks.

Broader Markets Mirror Weakness

The carnage extended well beyond large-cap stocks, with mid and small-cap indices bearing the brunt of selling pressure. Both segments recorded their worst weekly performance in months.

Sectoral Rout Across All Indices

No sector was spared from the week's selling pressure, with all sectoral indices posting losses. The Nifty Energy index led the decline with a 5% drop, marking its worst weekly performance since February of the previous year when it had fallen 7%.

Key Sectoral Performance:

• Nifty Energy: Down 5% (worst week since February 2024)
• Nifty Metal: Declined 2-3% (all but one constituent in red)
• Nifty Realty: Fell 2-3% (all but one constituent posted losses)
• Nifty Auto: Down 2-3% overall, with exceptions including Eicher Motors and Bajaj Auto

In the auto sector, while Eicher Motors and Bajaj Auto managed to outperform, other constituents declined between 0.40% and 5.50% for the week.

Earnings Season Ahead

The market's attention now turns to the upcoming quarterly results season, which begins next week. Key announcements include TCS and HCLTech reporting on Monday, while index heavyweight Reliance Industries is scheduled to announce results on Friday. These earnings could provide crucial direction for market sentiment following this week's sharp decline.