What is SGX Nifty?

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  • 18 Sep 2023
What is SGX Nifty

Based on the trading activity in SGX Nifty futures, this represents an indicative opening level for the Nifty 50 Index. Before the stock market's opening in India, traders and investors used the SGX Nifty to gauge investor sentiment and make informed trading decisions. However, from July 3, 2023, SGX Nifty will be renamed GIFT Nifty and traded on the NSE IX International Exchange. India will take over the USD 7.5 billion derivatives contracts already traded in Singapore. The SGX Nifty will no longer be listed on the Singapore Exchange. To learn more about what SGX Nifty is, read this article below.

The SGX Nifty Index derivative is traded on the Singapore Stock Exchange. This arrangement fixes the price of a share in advance and lowers the risk associated with any future investments.

To make it easier for you to understand, you should keep in mind that the SGX nifty is the futures trade nifty in Singapore, where the price of the share is preset, and the buyer and seller must agree to that pre-decided price regardless of any changes that may occur in the stock market in the future. This is similar to the Indian Nifty trades on the NSE, i.e., the Indian stock exchange platform, the SGX nifty is the futures trade nifty.

As the Singapore Stock Exchange is one of the biggest stock exchange and thus plays an essential role in this market, the SGX Nifty is a tool for anticipating and watching what's happening in the Nifty.

Trading in the SGX Nifty is only permitted for NRI Indians and foreign portfolio investors. The SGX Nifty can be considered for investors who cannot trade in the NIFTY. You are not allowed to buy or sell on the SGX Nifty if you are an investor who resides in India.

The SGX Nifty, as we discussed above, is a helpful tool for forecasting and tracking the behaviour of the Indian Nifty. The time difference between the Indian Nifty and the SGX Nifty, where the Singapore market opens about two and a half hours before the Indian market, is also significant. This allows investors, who can see the market fluctuations and observe what is going on in an overall trading system, to monitor the SGX nifty.

It gives investors an idea of the Indian market and whether it will open with positive or negative results. Those who are cautious about participating in the Indian market can, therefore, do so on SGX and monitor the SGX nifty to gain some insight into the Indian nifty and stock exchange platform ahead.

Although it is a reasonable way to assess India's markets and consider your chances, some of the results obtained by investors are not entirely accurate or depend upon any macroeconomic variables in both countries. It has various but essential effects on the behaviour of markets, as both countries, India and Singapore, have very divergent economies.

The India Nifty and the SGX Nifty are equally important because they influence each other's behaviour, so you must not talk about them without mentioning the other. Everyone wishing to enter the stock market and trade as an expert must first know or be familiar with SGX Nifty and many other financial terms commonly used to have a significant role in the stock market.

There are different advantages of the SGX Nifty these are as follows:

1. Extended hours SGX Nifty allows investors to trade the 50 index futures outside of regular business hours on India's stock exchange. This flexibility allows investors to take a diversified view of global market developments while at the same time adjusting their positions.

2. Early signal Traders will be better informed of trends in the Nifty 50 and global market sentiment when monitoring SGX Nifty developments closely. They can then make better trading choices.

3. Access for foreigners The SGX Nifty platform enables foreign investors to get exposure to the Indian stock market. It provides a way to enter Nifty 50 index futures for foreign investors who may face restrictions or limitations in their direct access to the Indian market. This will ensure a more liquid market and encourage international investment in Indian stocks.

The limitations of the SGX Nifty is as follows:

  • The economic cycle and global political events have made the SGX Nifty even more volatile than the NSE Nifty.

  • The SGX Nifty contract is not open to trading by Indian nationals.

  • Differences Between SGX Nifty And NSE Nifty India's stock market opened at 9:00 a.m. and closed at 3:45 p.m., giving it 6 hours to operate. On the other hand, the SGX Nifty trades on the Singapore Stock Exchange for 16 hours a day, from 6:30 am to 11:30 p.m.

  • The longer trading hours of the SGX ensure that the impact of global events on the stocks traded on that exchange is more significant. In addition, traders refer to SGX Nifty futures for early decisions compared to NSE Nifty futures.

Conclusion

Two important indices on the market are the Nifty and the SGX Nifty. However, it is helpful to take account of your investment objective and risk tolerance before investing in the market. Make sure you do thorough research and make an informed decision. You can open a Kotak Securities demat account to start your SGX investing journey.

FAQs on SGX Nifty

This index is regarded as an excellent indicator when learning how India's markets will open in a day. Many traders in India are following this, trying to predict the stock market's direction. Depending on the movement of the SGX Nifty, intraday traders may buy or sell positions in Indian stock markets.

On July 3, SGX Nifty changed its name to GIFT Nifty. From July 3, 2023, the famous SGX Nifty index will significantly change its name to GIFT NIFTY as part of global trading developments.

The Sgx trading day shall be Monday to Friday. The opening time of the SGX is between 09:00 and 06:15 as per SGT or between 06:30 and 3:45 as per IST. The second session runs from 4:40 PM to 2:45 AM (according to IST) or 6:40 PM to 4:45 AM (according to SGT).

You need to set up your trading account with a broker before investing for the first time. This account lets you purchase and sell shares in Singapore's securities market.

The usual board lot size for stocks at the Singapore Exchange (SGX) has decreased from 1,000 to 100 units. As a result, regular retail investors can now purchase a minimum of 100 shares, providing them access to several costly blue-chip stocks.

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