How GIFT Nifty (SGX Nifty ) Impacts Indian Market?

phone showing weakness in stock market and Singapore exchange


Singapore Exchange Nifty or SGX Nifty is the Nifty50 future contract offered by Singapore exchange. SGX Nifty trades for 16 hours a day in Singapore stock exchange. Trading in SGX Nifty starts from 6.30 A.m. and closes at 11.30 p.m. Indian standard time. As per the latest report by Securities and Exchange Board of India (SEBI) SGX Nifty will be known as GIFT Nifty from 3rd July 2023. The entire trading activity will be shifted to Gift city in Gujarat as per the report.

SGX Nifty (GIFT Nifty) provides an opportunity for foreign institutional investors to participate in Indian market without directly accessing the Indian stock exchanges. SGX Nifty enables the opportunity for foreign investors to trade in Nifty even when the Indian markets are closed. Also provides portfolio diversification facility to minimize risk for foreign investors trading in Indian market. Traders and investors use SGX Nifty as an indicator of the opening level in Indian market. SGX Nifty helps the market participants to get an understanding about the market sentiment and initial direction in market.

How SGX Nifty (GIFT Nifty) Gives Gap Up and Gap Down Indication?

Singapore Exchange Nifty (SGX Nifty) provides the market participants an indication of Gap Up opening and Gap Down opening in Indian market. Based on the weakness and positivity in trading movements of SGX Nifty before the opening of Indian market, market participants can get potential indication of market trend in Indian market. The SGX Nifty is open in Singapore stock exchange from 6.30 am to 11.30 pm IST. Indian market opening will be based on the trading activity in SGX Nifty after Indian markets are closed.

  • Trading in SGX Nifty will be influenced by U.S market and European market after the trading hours in Indian market. Also it will be influenced by the Asian markets before the opening of Indian market.
  • We can see a Gap down opening in Indian market if SGX Nifty is trading lower than the previous day closing price in Indian market. Global market condition can directly impact the market sentiment of SGX Nifty. If global market is weak then there is higher probability for Indian market to open lower.
  • A Gap Up Opening can be seen in Indian market if SGX Nifty is trading higher than the previous day closing price in Indian market. If the global market is trading positively then there is higher probability for Indian markets to open higher.

Why SGX Nifty Is Important ?

  • Risk Management – SGX Nifty helps the investors and traders to hedge their investments in Indian market. If there is any overnight market uncertainty or a crash. In case of any expected global event which can cause huge negative impact on Indian market, investors can take necessary hedge positions and safeguard their investments.
  • Determine opening levels – SGX Nifty provides investors and traders an insight about the market sentiment and the levels at which the market will open. SGX Nifty provides an overview about whether there will be a Gap Up or Gap down in Indian market. Also help the market participants to anticipate the initial market direction of Indian financial market.
  • Arbitrage trading – SGX Nifty helps traders arbitrage trading opportunity and make an income from the price difference of both markets. SGX Nifty enables traders to generate an income by trading.
  • Access to Global Investors – SGX Nifty provides global investors and financial institutions access to Indian market. Global investors can participate in Indian market. Also can create a diversified portfolio to reduce risk and generate wealth in the long term.

Major Factors That Affect SGX Nifty Price Movement

  • Global Market – The major factor that can create an influence in price movement of SGX Nifty is global market condition. Huge movement in global markets can cause gap up or gap down opening in Indian market accordingly. For example, if global market has moved down a lot, there is high probability for SGX Nifty to move down and Indian market to open with a Gap down.
  • Economic Indicators – Economic indicators like CPI (consumer price inflation) data, GDP data, IIP data can create an impact on the price movement of SGX Nifty. The market sentiments towards the data or economic indicators will be reflected in the price of the economic indicator.
  • Events and News – SGX Nifty tends to react towards the market sentiments brought in by an event or a news. For example, any negativity news about Interest rate decision can impact the price of SGX Nifty to move down.

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