The SGX Nifty is one of the most closely watched financial instruments by investors and traders in India and across the globe. It serves as a futures contract based on the Nifty 50 Index, which is the benchmark equity index of the National Stock Exchange (NSE) in India. Traded on the Singapore Exchange (SGX), the SGX Nifty allows international investors to take positions on Indian markets without directly participating in Indian exchanges.

What is SGX Nifty?

The term SGX Nifty stands for Singapore Exchange Nifty. It represents futures contracts of the Nifty 50, which comprises 50 of the largest and most actively traded stocks in India. Each SGX Nifty contract tracks the performance of the Nifty 50 index. Investors and traders use it to speculate or hedge against movements in the Indian equity market.

Trading Hours and Global Impact

One of the main advantages of the SGX Nifty is its extended trading hours. It operates nearly 16 hours a day, from 6:30 AM to 11:30 PM IST, which is much longer than the NSE’s trading window of 9:15 AM to 3:30 PM IST. This extended period allows investors to respond to global events that occur before or after Indian market hours.

Because of this, SGX Nifty often acts as a predictor of market sentiment. When the SGX Nifty trades higher before the Indian markets open, it signals a positive start for the Nifty 50 index. Conversely, a decline suggests a negative opening. Hence, analysts and traders closely monitor SGX Nifty to gauge early market trends.

Why is SGX Nifty Important?

SGX Nifty plays a crucial role for:

• Foreign Investors: It allows them to participate in Indian markets without dealing with Indian regulatory frameworks or currency exchange issues.

• Indian Traders: They use SGX Nifty movements as a sentiment indicator to plan intraday or short-term strategies.

• Global Markets: It connects the Indian stock market with the global financial ecosystem, reflecting how international developments might affect Indian equities.

Transition to GIFT Nifty

In 2023, a significant development took place. The trading of SGX Nifty was shifted to GIFT City (Gujarat International Finance Tec-City) in India, and it was renamed GIFT Nifty. This move aimed to bring trading closer to Indian jurisdiction and enhance India’s status as a global financial hub. The contracts now trade on the NSE International Exchange (NSE IX).