SGX is the Singapore Stock Exchange. The top 50 businesses listed on the NSE form Nifty, the benchmark index of the Indian National Stock Exchange (NSE). So SGX Nifty is a futures contract for the Nifty 50 index.
It allows investors outside of India to bet on the direction of the Indian stock market before Indian markets open for trading. It is traded during non-Indian market hours.
SGX Nifty provides a way for investors to speculate on the opening levels of the Indian stock market based on various factors such as global market trends and economic news.
What is SGX Nifty?
SGX Nifty is a derivative contract based on the Nifty 50 Index and traded on the Singapore Exchange (SGX). It allows foreign investors to take exposure to the Indian stock market without being directly registered in India. Traders widely use SGX Nifty to gauge market sentiment and predict the Indian stock market’s opening trend.
Benefits of the SGX Nifty
Early Signal: Traders closely watching the trends on SGX Nifty are better informed about the trends in the Nifty 50 index. This information assists investors in hedging their positions in the Indian market.
Extended Trading Hours: SGX Nifty provides extended trading hours, allowing investors to trade the Nifty 50 index almost 24 hours a day. This gives them more flexibility and opportunities to trade according to global market movements.
Access for Foreign Investors: SGX Nifty encourages participation from international investors who want to invest in the Indian equity market but are not able to do so due to regulatory or logistical constraints. SGX Nifty also helps ensure tighter spreads and a smoother trading experience due to enhanced liquidity.
Key Features of SGX Nifty
- Based on Nifty 50 – Tracks India’s benchmark Nifty 50 Index.
- Traded on the Singapore Exchange (SGX).
- Used for hedging and speculation by international investors.
- Operates 16 hours daily, compared to Indian markets, which are open for 6.5 hours.
- Highly liquid with a large volume of foreign institutional participation.
How is SGX Nifty different from Indian Nifty?
SGX Nifty and Indian Nifty are both indexes that track the performance of the top 50 companies listed on the National Stock Exchange (NSE) of India. However, they differ in several ways:
- Trading Platform: SGX Nifty is traded on the Singapore Exchange (SGX), while the Indian Nifty is traded on the NSE in India.
- Contract Size: The contract size for SGX Nifty is denominated in US dollars and does not have a specific number of shares per contract. In contrast, the Indian Nifty is traded in contracts or lots of 75 shares each.
- Availability: SGX Nifty is available for international investors who cannot access the Indian stock markets, but it is not available for trading to Indian investors due to restrictions on trading derivatives listed on foreign exchanges.
- Purpose: SGX Nifty allows investors to take positions on the Nifty index outside Indian market hours and can be used as a tool to predict the opening trends of the Indian stock market.
FAQs
Recent Developments & SGX Nifty Future?
- NSE & SGX Partnership (NSE IFSC Nifty): To bring SGX Nifty closer to India, SGX & NSE launched a joint venture at GIFT City, Gujarat. This will shift Nifty trading volumes from Singapore back to India.
- Impact of Global Events: SGX Nifty gets impacted by US Fed decisions, geopolitical events and global trends before they impact NSE Nifty.
Trading Hours of SGX Nifty?
- Pre-Opening Session: 6:30 AM IST (before Indian markets open at 9:15 AM).
- Main Trading Session: Till 11:30 PM IST (beyond NSE trading hours of 3:30 PM).
This extended trading window gives you a head start on market trends, especially after global events or overnight movement in other markets.
