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Average (DJIA) and S&P 500. On Wednesday, National Stock Exchange (NSE) signed an agreement with the world’s leading derivatives market Chicago Mercantile Exchange (CME) that will also allow NSE’s Nifty50 index to be traded on CME.

While Nifty contracts on CME will be dollar-denominated, S&P 500 and DJIA contracts in India will be rupee-denominated. NSE will have to obtain regulatory approvals for the launch of the US futures contracts in India.

In another development, NSE also renewed its pact with Singapore Exchange (SGX) and is planning to introduce more India-linked products on the latter’s platform. Financial Chronicle had reported on January 19 that NSE is reviewing terms of agreement with SGX and is likely to give it exclusive rights for Nifty futures in Asia.

A press statement said NSE and SGX will also look into a bilateral securities trading link to enable investors in one country to seamlessly trade on the other country’s exchange.

CME group will have exclusive rights for the Nifty contracts within the Americas and Europe.

“The association with CME Group will make the Nifty 50, and, over time, potentially other products across various India-related asset classes, available to a much larger community of traders and investors,” said NSE managing director and CEO Ravi Narain.

Similarly, investors in India will have access to new exchange traded products that reflect some of the world’s most widely traded equity indexes. This will improve portfolio choice for Indian investors by widening the array of assets that they can hold in their portfolios, he said.

`”It is a good idea. This will help Indian investors to access international products,” said Jayanth R Varma, professor of finance and accounting area at IIM, Ahmedabad. He also allayed fears that overseas markets will set the tone for Indian markets saying home markets always drive the index futures prices, even if they are listed outside.

Terry Duffy, executive chairman, CME Group said the arrangements will allow CME to expand its benchmark equity index product suite and provide customers with access to a futures contract that is based upon the leading benchmark index reflecting the Indian equity markets.

In addition to our existing partnerships or investments in Brazil, Dubai, Korea, Malaysia, Mexico and Singapore, partnership With NSE will further expand our customers’ access to the most actively traded foreign markets, while also increasing access for global investors from within these regions to CME Group products and services, said Craig Donohue, chief executive officer, CME Group.

“S&P Indices has a successful, 27-year relationship with the CME Group in the US futures market, and a strong 10-year association with NSE in developing stock market indices in India,” said Alexander Matturri, executive managing director at S&P Indices.

Roopa Kudva, Standard & Poor’s region head of South Asia, said the move underscored S&P’s commitment to providing index solutions to all of Asia Pacific, since this is the first time that the S&P 500 will trade as a derivative on a non-US exchange.