The formation of GIFT Nifty marks a significant change in India’s financial trading landscape. This idea gives index trading a new angle that closely matches the specifics of the home markets. Let’s analyse the strategic relevance of GIFT Nifty for traders and investors and clearly understand what it means.
One of the most innovative ideas in India’s financial scene is the Gujarat International Finance Tec-City Nifty or GIFT Nifty. It consists of businesses that are listed on the National Stock Exchange (NSE) in Gujarat’s GIFT City, a hub for global financial services.
This index provides insights into general market trends within the GIFT City framework. It acts as a benchmark for monitoring the success of these businesses.
Investors and market participants may use GIFT Nifty better to understand the dynamics and changes within this financial centre. It allows evaluation of the performance of enterprises in GIFT City and helps make well-informed investment decisions. It operates during regular market hours, which coincide with the trading timings of the Nifty index.
Timings of GIFT Nifty and SGX Nifty
GIFT Nifty timings are crucial in their accordance with the global markets and how they influence market players. This is done following the National Stock Exchange’s regular trading hours, from 9:15 am to 3:30 pm Indian Standard Time (IST). Because of this timing, the index can synchronise with the home market and provide investors with trading possibilities and real-time price fluctuations.
The Singapore Exchange (SGX), on the other hand, is open at other times. Based on the Nifty index, SGX Nifty is a derivative instrument that trades from 6:30 am to 11:30 pm Singapore Standard Time (SST).
Due to its wide trading window, which allows participants to trade SGX Nifty futures from different time zones, it is well-liked by foreign investors who want exposure to Indian shares.
Several concerns exist about the two indexes’ disparate trading times. Initially, this enables investors to take advantage of opportunities for arbitrage between the two markets by capitalising on price differences within the overlapping trading hours.
Also Know More About Share Market Timings for BSE and NSE
How will Investors Gain from GIFT Nifty?
GIFT Investors can benefit from Nifty’s improved alignment with local markets, increased accessibility, and the possibility for higher liquidity.
Adhering to the National Stock Exchange’s regular trading hours in India guarantees that investors may engage in active market participation throughout significant trading windows. Investors can benefit from real-time price changes and respond quickly to market events because of their alignment with domestic markets.
It also improves accessibility for foreign and domestic investors. It offers investors in India a smooth trading experience because its trading schedules are in tune with the NSE’s. Players from various time zones can also access and trade Indian stocks through the SGX Nifty’s extended trading window based on the Nifty index.
Investors now have more chances to diversify their holdings and take advantage of the growing potential of the Indian markets thanks to this enhanced accessibility.
Increased liquidity for the index is possible. Because of its correlation with the Nifty index, investors have access to a well-known benchmark for Indian equities.
The participation of both local and foreign investors contributes to the index’s liquidity by fostering a lively trading environment that facilitates effective price discovery and lower trading costs.
What’s in Store for the SGX Nifty?
On June 30, 2023, all open contracts for the Singapore ExchangeNifty concluded trading, shifting their volume to the NSE International Financial Services Centre (IFSC) in Gujarat, India. This transition was part of an agreement between India’s National Stock Exchange and the SGX to redirect the Nifty contracts. Consequently, SGX Nifty was scheduled to delist from the Singapore Exchange. This move aimed to centralise trading and channel the liquidity of Nifty contracts to the NSE IFSC, streamlining access and enhancing market efficiency for investors trading Indian equity derivatives.
Difference Between SGX Nifty and GIFT Nifty
Here are some distinctions between the SGX NIFTY and GIFT NIFTY index –
- Trading Locations: SGX Nifty refers to the Nifty index futures that are traded on the Singapore Exchange, while GIFT Nifty represents the Nifty index futures that are traded on the Gujarat International Finance Tech (GIFT) City exchange in India.
- Market Accessibility: With SGX Nifty, investors from across the world may trade the Nifty index around the clock, even when Indian markets are closed. Conversely, GIFT Nifty functions during Indian trading hours, offering local investors a means of engaging in direct trading of Nifty index futures.
- Regulatory Environments: The Singapore Exchange Regulation (SGX RegCo) provides oversight and rules for the operation of SGX Nifty. In contrast, GIFT Nifty adheres to Indian laws and regulations and functions under the regulatory framework established by the Securities and Exchange Board of India (SEBI).
Where Will GIFT Nifty Data be Available?
Investors seeking reliable and updated information on this index have several platforms and sources to access relevant data. Financial news platforms such as Bloomberg, CNBC, and MoneyControl provide comprehensive coverage of it, offering real-time updates, market analysis, and expert insights.
Additionally, stock exchange websites such as NSE India and BSE India have pages specifically devoted to this index, providing investors with historical data, trading volumes, and comprehensive details on index futures. Market analysis tools such as Investing.com also offer charts, technical analysis indicators, and customisable watchlists to assist investors in making informed decisions.
Shifting to GIFT Nifty from SGX Nifty
In the Indian financial markets, the switch from SGX Nifty to GIFT Nifty is a calculated move influenced by several vital variables.
First, by combining Nifty index trading in the domestic market, the change seeks to improve strategic market positioning. By moving trade activity to this index, India hopes to boost its status as a global financial hub and advance its financial ecosystem.
Regulative issues are also crucial in this transformation. By moving trade to the Nifty futures market, the Indian government can better oversee and regulate it. Ensuring a more open and controlled trading environment preserves the market’s integrity and inspires trust in investors.
In addition, the shift showcases India’s objectives for the development of the financial sector. This index’s designated international finance hub seeks to draw in foreign investors and advance the growth of financial services. The SGX Nifty’s move to this index supports this goal and makes it easier for India’s financial services and infrastructure to expand.
How will the GIFT Nifty Be Exchanged?
The Nifty index trading platform provides a range of trading techniques and procedures. Potential traders may access it through approved platforms that offer a user-friendly interface and real-time market data.
These platforms give traders flexibility and control over their trading tactics by enabling them to place various order types.
After an order is carried out, the settlement procedure starts. It uses a central counterparty (CCP) system to support the T+2 settlement cycle, which settles trades within two business days after the trade date.
Traders must have a trading account with a recognised broker or financial institution that grants access to interact with the platform. They should acquaint themselves with the trading protocols, order types, and settlement procedures for efficient navigation.
Conclusion
With GIFT Nifty, investors have a special chance to gain access to the Indian equities market via a global financial hub. With its superior infrastructure, various sectors, and tax perks, GIFT Nifty has the potential to draw in global investment and boost the Indian economy. To start trading and investing in the stock market, open your Demat account with Angel One for free.
FAQs
What was GIFT Nifty's previous name?
GIFT Nifty was formerly known as SGX Nifty. On July 3, 2023 it moved to the new international exchange NSE IFSC in GIFT City, Gandhinagar, Gujarat, and changed its name from SGX Nifty.
How does GIFT Nifty differ from SGX Nifty?
GIFT Nifty trades during Indian market hours, catering to local investors, while SGX Nifty allows global trading round-the-clock on the Singapore Exchange.
What is Gift Nifty's platform?
Gift Nifty (formerly SGX Nifty) is based on the Nifty 50 index and trades at the NSE International Exchange every 20 hours.
How will GIFT Nifty be exchanged?
GIFT Nifty trading involves accessing approved platforms with various order types and settling trades through a central counterparty system within two business days.
