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UPDATE 2-Nasdaq rides trading boom to higher-than-expected profits

(Adds details from earnings, background on rising trading volumes, quote from CEO)

Jan 27 (Reuters) - Nasdaq Inc on Wednesday reported quarterly profits that topped Wall Street expectations, as trading volumes surged due to market volatility amid the COVID-19 pandemic, and investors poured into products linked to the exchange operator’s tech-heavy indexes.

Nasdaq’s adjusted net income was $1.60 per share for the fourth quarter, topping the mean estimate of analysts by 15 cents, according to IBES data from Refinitiv.

Revenue from Nasdaq’s market services unit, its biggest business, jumped 29% to $291 million from a year earlier, with trading levels remaining elevated after soaring when stocks bounced back from an initial plunge at the beginning of the pandemic.

The shift to working from home also helped accelerate the trend of rising retail participation in the markets that began months earlier as retail brokerages slashed transaction commissions to zero.

High demand for technology stocks that underpin the work-from-home environment helped drive a 70% year-over-year increase in indexing revenues to $97 million.

Assets under management linked to Nasdaq’s indexes, such as the company’s flagship Nasdaq 100 index, which includes names such as Apple Inc, Amazon.com Inc, Tesla Inc and Netflix Inc, grew by 54% from a year earlier to $359 billion.

“We will continue to advance our expansion of our increasingly popular indexes and trusted data products to new clients in new geographies,” Nasdaq Chief Executive Officer Adena Friedman said on a call with analysts.

Revenue at Nasdaq’s investment intelligence segment, which includes indexing and is the company’s biggest non-trading business, grew 27% to $247 million.

Nasdaq’s market technology segment revenues rose 8% to $106 million.

Overall net income for the quarter rose 11% to $224 million.

Excluding transaction-based expenses, net revenue was up 22% at $788 million. (Reporting by John McCrank in New York and Niket Nishant in Bengaluru; Editing Ramakrishnan M. and Steve Orlofsky)

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