Gift Nifty, previously recognized as SGX Nifty, represents a pivotal evolution in Indian financial markets. This derivative contract, intrinsically linked to India’s prestigious Nifty 50 index, has transitioned from its origins on the Singapore Stock Exchange (SGX) to the NSE International Exchange (NSE IX) in Gandhinagar, India. This relocation marks a significant strategic shift, reshaping the landscape for trading in Indian equities and derivatives.
Primarily utilized by hedge funds and institutional investors, Gift Nifty serves as a vital instrument for hedging exposures within the Indian stock market. Beyond hedging, active traders leverage Gift Nifty to speculate on the Nifty 50 index’s future trajectory, capitalizing on its market movements to inform and refine their trading strategies.
The migration from the Singapore Exchange to NSE IX encompassed the entirety of SGX Nifty’s derivative contracts, a substantial portfolio valued at $7.5 billion. Nestled within GIFT City, NSE IX now boasts a comprehensive suite of financial products, including GIFT Nifty 50, GIFT Nifty Financial Services, GIFT Nifty Bank, and GIFT Nifty IT derivative contracts, broadening the scope for investors and traders.
Accessibility to GIFT Nifty index products is now expanded to any trading member—Indian or international, registered or non-registered—equipped with an office through a branch or subsidiary model, upon securing NSE IX membership. However, it’s crucial to note that direct access for Indian retail investors to GIFT Nifty products remains outside the purview of the Liberalized Remittance Scheme (LRS).
Historically, SGX Nifty trading on the Singapore Exchange Limited (SGX) spanned an extensive 21-hour window, operating from 6:30 a.m. to 11:30 p.m. IST. This contrasted sharply with the domestic Indian CNX Nifty’s trading hours on the NSE, which are limited to six and a half hours (9:00 am to 6:10 pm). Crucially, Gift Nifty’s price fluctuations persist both before and after Indian market hours, reflecting global market trends even outside of India’s trading day.
The influence of SGX Nifty, now Gift Nifty, on the Indian market is undeniable. It provides an invaluable early indicator and forecasting tool for Nifty movements. The time zone difference offers investors a strategic advantage, enabling them to monitor Gift Nifty to preemptively gauge market dynamics and gain a holistic view of the trading environment before the Indian market officially opens.
Effective July 3, 2023, SGX Nifty officially adopted the new moniker, Gift Nifty. This rebranding signifies more than just a name change; it represents a transformative shift of derivative trading, encompassing $7.5 billion in value, from the Singapore Exchange to the NSE International Exchange in Gandhinagar, Gujarat. Gift Nifty today stands as a symbol of the evolving dynamism of Indian financial markets, presenting both domestic and international investors with novel opportunities and enhanced avenues for strategic market engagement.
