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What is SGX Nifty, and How Does it Differ from Indian Nifty?
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Stock market investment is a popular way to invest your money. As more people become interested in stock investing, understanding Nifty becomes more important. Nifty is a group of companies in the index market belonging to various sectors in the stock exchange.
In different countries, there are different indices reflecting the overall market performance. For instance, the SGX Nifty index belongs to Singapore, while the Indian Nifty belongs to India. As the Nifty is one of the major stock indices in India, it plays a crucial role in helping Indian investors make better investment decisions.
In the following sections, you will learn more about SGX Nifty and how it differs from Indian Nifty.
What is SGX Nifty?
SGX Nifty is a Nifty index derivative traded on the stock exchange platform of Singapore. To understand this better, remember that NSE is the stock exchange for the Indian Nifty while SGX is the exchange for the Singapore Nifty future. It sets a predetermined share price for a share and reduces the investment’s future risk. Since the share price is preset when trading on the SGX Nifty India, trades must commit to that price despite SGX market changes in the future. Accordingly, investors can design pre-market trading and hedging strategies to maximise returns.
Key features and characteristics of SGX Nifty investing include the following:
SGX Nifty vs. Indian Nifty
Here is a comparative analysis of Singapore Nifty and Indian Nifty:
SGX Nifty Futures
The Singapore Nifty is a futures contract based on the Indian NSE’s 50th index. Even during the non-trading hours of the Indian stock market, the SGX Nifty lets investors in other countries hedge, speculate, and invest in Indian stocks. Therefore, it is an attractive option for international traders who want to invest in Indian stocks without registering with the country’s authorities.
Advantages of SGX Nifty
Global investors who seek exposure to the Indian Nifty can achieve that without directly accessing the Indian stock exchange. It offers them a convenient way to diversify their portfolio across various trading markets. Moreover, investment in the SGX Nifty index enables investors to hedge exposure to the country’s equities. By taking SGX positions, investors can avoid potential losses from their Indian market holdings, reducing their overall risk.
Disadvantages of SGX Nifty
Despite so many advantages, SGX Nifty investing has some disadvantages as well, such as:
How Does SGX Nifty Impact the Indian Market?
SGX Nifty today impacts the Indian market in many ways, including the following:
Impact and Trading Hours
SGX market remains open 21 hours a day, from 6.30 am to 3.40 pm and 4.35 pm to 2.45 am. It overlaps with European, Asian, and American trading hours, impacting the global economic cycles. This platform allows potential traders and investors to gain important trading information and plan their hedging strategy accordingly.
Trading Procedures
The contracts can be of two types: monthly and quarterly. The last trading day is the second business day after the delivery day, excluding non-business days. Since the exchange works 21 hours a day, it helps investors plan an efficient trading and hedging strategy according to their investment goals and risk appetite.
Frequently Asked Questions
Q: What is the purpose of SGX Nifty?
The purpose of the SGX Nifty index is to create a derivative of the Nifty index for trading in the Singapore Stock Exchange.
Q: Why was SGX Nifty renamed GIFT Nifty?
SGX Nifty was renamed GIFT Nifty in July 2023 because now it will be entirely conduct trading from NSE IFSC-SGX Connect at GIFT city, Gandhinagar. Gujarat International Finance Tec-City (GIFT) is a central business district in the Gandhinagar district of Gujarat.
Q: Which global market affects the Indian market?
The US market significantly affects the Indian market. The strength of the US dollar is a critical economic indicator worldwide.
Q: Does SGX Nifty affect the Indian market?
The Singapore Nifty opens about 2.5 hours before the Indian stock market, letting traders measure the Indian market’s potential direction. Fluctuations in the SGX Nifty future show how the Indian Nifty will behave during the da
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