Introduction
India is a fast-growing economy, and the confidence investors have in it can also be reflected in the record highs the Sensex and Gift City Nifty indices have touched. What a significant pillar in moving the SGX Nifty from Singapore to Gandhinagar, Gujarat, last July. Now christened GIFT Nifty, its shift portends India beefing up its financial market infrastructure to attract global investors. This rebranding and relocation both surely spell out the commitment of India in the direction of establishing itself big in the world of finance.
What is GIFT City Nifty?
The Nifty was termed ‘Gift Nifty’ from the index being a benchmark of listed top 50 companies in the ambitious Gujarat International Finance Tec-City (GIFT City) project.
It was initially under the banner of SGX Nifty, which has rebranded and repositioned to the NSE–International Financial Services Centre, housed in GIFT City, Gandhinagar, Gujarat, with effect from July 3, 2021. The introduction has enabled the index to operate in two trading sessions, aligning with global market timings. This aims to facilitate India’s securities market upgrades and attract foreign investments.
GIFT Nifty launch date
GIFT Nifty became the first cross-border initiative between Singapore and India in the Indian capital markets. After the International Financial Services Center Authority (IFSCA) and the Monetary Authority of Singapore (MAS) granted the necessary approvals, the launch took place on July 3, 2023.
National Stock Exchange of India
NSE India is the short form representing the National Stock Exchange of India, established in 1992. It has revolutionized the capital market in India with the induction of a fully automated, fully integrated screen-based electronic trading system. NSE is the very pulse of India’s financial market. It reproduces to a great extent the Indian economy’s health, providing a platform for all forms of efficient trading concerning investments in every security category.
GIFT Nifty and SGX Nifty Timing
The most crucial difference between GIFT Nifty and SGX Nifty lies in time. The working hours of GIFT Nifty are linked with the stock exchange in India, i.e., 9:15 a.m.—3:30 p.m. by Indian Standard Time. This enables domestic investors to be updated on the current trends of the local bourses, making trading genuinely seamless.
Contrasted with this is SGX Nifty, which is a derivative of the Nifty index, and its trading hours are between Singapore Standard Time of 6:30a.m. 11:30p.m. Its design is the intention of international investors who would be able, irrespective of time zones, to trade effective SGX Nifty contracts and gain exposure about Indian equities during non-Indian market hours.
The varying trading hours allow opportunistic arbitrage by investors, taking advantage of price differentials of the GIFT Nifty against the SGX Nifty between 3:30 p.m. and 4:30 p.m., India time.
BENEFITS: There are several critical ones
Extended Trading Hours: GIFT Nifty runs for covering nearly 20 to 21 hours, which is longer compared to SGX Nifty, which runs for 16 hours. The extended trading period coincides with major financiers across Asia, the US, and Europe, enabling traders to match developments in other global markets and harness most trading opportunities.
Single Liquidity Pool: GIFT Nifty will form a part of a single, united liquidity pool. This lowers friction in markets as all trading will happen in one pool. This makes interactions between buyers and sellers frictionless and smooth in nature, at this moment giving rise to the most accurate markets possible. This leads to the least amount of market fragmentation, making trading cheaper.
High certainty and security: GIFT Nifty is under the regulatory framework of the International Financial Services Centre Authority, providing for the safe, proper conduct of trading in an environment upholding high standards of disclosure, trading practices, and risk management. This would, in turn instill confidence in the reliability and usefulness of GIFT Nifty as a financial instrument.
Difference between SGX Nifty and GIFT Nifty
Following are some common differences between Nifty-SGX and Nifty at GIFT:
Dual Track:
NIFTY SGX is an SGX Nifty.
SGX Nifty: Global investors trade Nifty index futures on the Singapore Exchange, allowing them to participate even when the Indian markets are closed.
GIFT Nifty: Domestic investors trade Nifty index futures on the Gujarat International Finance Tec-City (GIFT City) exchange in India, which operates within Indian trading hours.
It operates within Indian trading hours and primarily caters to domestic investors.
Access Scholarships:
Nifty Futures: Has trading availability for non-resident investors, offering 24-hour access to take a position in Nifty index futures outside market hours.
GIFT Nifty, which operates through Indian trading hours, allows domestic investors to directly trade the Nifty index futures at an Indian exchange platform.
Benefits of GIFT Nifty
Linking with the Domestic Market: GIFT Nifty will be closely knitted with the local Indian market, and therefore, it will be much easier for the local investors of India to participate and accordingly, this will enable GIFT Nifty to be the better reflection for the broader Indian economy and the market movements.
Extended Trading Hours: The GIFT Nifty will have counter-hours compared to trading on the National Stock Exchange of India. In accordance, it will be offering flexibility to investors in trading during different time zones, and depending upon their choice, they can trade derivatives outside of Indian trading hours.
Superior Liquidity: By channeling trades via the GIFT City platform, there is enhanced market liquidity for the Nifty derivatives. Higher liquidity in a market will help in better price discovery and lower transaction costs, resulting in a smoother execution of trades and benefiting thereby institutional and individual investors.
The benefits make GIFT Nifty indeed a fantastic option for an investor who is looking to get efficient exposure to the Nifty index as well as the broader Indian equity markets in a regulated and accessible framework.
TRANSITIONED FROM SGX NIFTY TO GIFT NIFTY BE
Regulatory Changes: The change was done in light of the altered regulatory environment in India, which was strict to still keep control over the flow of capital in the country and ensure the benefits of trading were accruing to the country.
Market dynamics indicated high volumes of Nifty derivative contracts on SGX, thus showing the instrument’s popularity among global traders for getting exposure to Indian markets.
Global Financial Integration: GIFT Nifty’s shift to GIFT City, Gujarat, resonates with the overall objectives of integrating India with the rest of the world’s financial system to create a more tax-effective trading ecosystem.
Liquidity and Cost Efficiency: By onshoring the trading within India, GIFT Nifty increases market-wide liquidity and thus also decreases the cost of trading, also probably more than SGX Nifty since the latter was putting feet in both the SGX and the INX.
Both the development and promotion of GIFT City as a global financial hub go hand-in-hand with funding incentives to foreign investors to come and trade within India.
At an overall level, the transition to the GIFT Nifty is a strategic move supporting enhanced market oversight in India; it will help attract the flows of foreign institutional investments to India and build strength within its global financial clout.
Where Can I Find GIFT City Nifty Data?
Individuals in search and desire to acquire current and reliable information related to GIFT Nifty have multiple proxies and sources, such as the following:
Financial News Portals – Bloomberg, CNBC, and MoneyControl provide the latest coverage on GIFT Nifty with live updates, market analysis, and expert views.
Stock Exchange Websites – Developed separate sections of the website: GIFT Nifty on the official NSE India and BSE India websites. Such sections provide detailed information on index futures, historical data, and trading volumes.
Market Analysis Tools: Websites like Investing.com and TradingView provide charts, technical analysis indicators, and watch lists to be maintained. Such utilities give follow-ups of market developments, hence enabling investors to take positions effectively by utilizing in-depth market analysis.
These sources, as quoted above, help keep investors updated with the newest GIFT Nifty information to guide them further in making wise trading and investing decisions.
How SGX Nifty Affects the Indian Market.
SGX Nifty plays a massive role in gauging the psyche of the investors concerning the Indian stock market, primarily capturing the Nifty index. SGX Nifty is also the first trading opening for the day, with an availability of 2½ hours before the Indian stock market opens.
The best part is for an investor to constantly monitor SGX Nifty to determine the trend of probable market fluctuations and check whether the Indian market will open in the positive or enter into the red.
This early insight is precious for investors otherwise who would have trembled to invest directly in the Indian Stock Exchange. The insight thus helped them make some porous venture mode on SGX Nifty about the stock trends to finalize more ambitiously on their ventures into Indian Equity stocks.
In the context of the sentence, it is notable, however, that using the SGX Nifty helps one to gauge the Indian market, but all the time, the kind of picture rendered is not perfect. Economic factors and the market structure of the two countries could play a role in the influence resulting in a different market behavior in each country.
Therefore, beginners wanting to start stock market trading must learn about these indices and their implications. Understanding these terms and their functions will make you confident enough to handle the stock market effectively.
Pros of SGX Nifty
Following are the benefits of SGX Nifty:
Attracts Foreign Investors: SGX Nifty attracts more foreign investors, which participate in the Indian derivative market. It gives them a credible opportunity to get exposure to Indian stocks and indices without the necessity of accessing the Indian market infrastructure directly.
Proximity and Connectivity: Geographical proximity allows better connectivity of the two stock exchanges from India and Singapore, respectively. It always pushes trading processes to work faster and better in performance so that it lessens the usual time gap and strengthens interaction of the markets.
Alternative Access: SGX Nifty is a valuable investment for investors facing this situation as it provides an alternative to the Indian markets. It allows investors to work in the field of Indian equity derivatives under more traditional currency and regulation environments.
Cross-Market Trading Adaptation of New Technologies: The SGX Nifty market trades on an extended trading hour that is as long as 16 hours. This gives room for the trade after-hours considerably beyond the market opening in India.
This benefits hedge funds and other global investors to take advantage of overnight developments from Wall Street and other international markets to improve the strategies and decisions made in their trading.
This makes a comprehensive case for growing market participation, enhancing trading efficiency, and providing strategic advantages to global investors who wish to invest in a maturing Indian market.
Below are the cons of trading in SGX Nifty:
Higher Volatility: SGX Nifty tends to be much more volatile than NSE Nifty. Global economic and political fluctuations often sway SGX Nifty, which may not accurately reflect the actual conditions of the Indian market.
Restriction from Trading for Indian Residents: Indian residents cannot trade directly using SGX Nifty contracts.
Time Difference: SGX Nifty operates in a 16-hour market, responding faster to global events that impact all stocks traded there. This time difference can lead to poor decision-making for early morning traders compared to those trading on NSE Nifty.
These factors tend to reveal differences and difficulties when it comes to trading in SGX Nifty when compared with NSE Nifty and seriously impact the attention of investors and their reaction to market dynamics between the different exchanges in a different regulatory environment.
Who is eligible to buy or trade in SGX Nifty?
Two main types of traders are attracted to trade in the SGX Nifty:
International traders stay out of India and face regulatory hurdles when attempting to trade directly on Indian stock exchanges like NSE. For them, SGX Nifty proves to be an excellent platform to have a wholesome thing of the Indian equity derivative for trading at their disposal. Foreign Entities and Mutual Funds: Foreign entities and mutual funds are holding larger funds in India, given that this economy will be among the fastest-growing ones in the coming years.
As a protective cover, they have been constructing their hedges by SGX Nifty. With that, they can manage their position well by exposure to Indian stocks and indices. SGX Nifty is an essential tool available to individual investors and institutional players outside India to cover dealing with Indian markets and managing their investments in a very controlled and accessible mode of interaction.
Can an Indian trade in SGX Nifty?
If you’re an Indian resident, you cannot trade the SGX NIFTY. For people living in India, it’s not permissible to trade any derivatives of non-Indian products— this is the law. But for NRIs, it is almost sure that they can trade the SGX NIFTY, depending obviously on the laws of the land where they reside. To sum up GIFT Nifty can help the flow of inward foreign investment in India’s derivatives market, while proximity ensures better connectivity that bridges Singapore and India. GIFT Nifty will help India to become globally competitive with the developed economy’s financial hubs, while with Motilal Oswal get-getaways free, one can open a free Demat account and transact in the equity markets with ease.