What is SGX Gift Nifty?
One of the key market indicators for the Indian equity market’s performance was the Singapore Exchange Nifty (SGX Nifty 50 Index). Traded on the Singapore Exchange, the SGX Nifty is a futures and options contract based on the Nifty 50 index. It represents the top 50 companies listed on the National Stock Exchange of India (NSE) and the SGX Nifty 50 futures and options allow investors to speculate on the NIFTY's movements during non-Indian trading hours.
On 3rd July 2023, the SGX Nifty officially rebranded to GIFT Nifty. All derivative contracts worth $7.5 billion have been migrated from the Singapore Exchange to the NSE International Exchange (NSE IX) in Gandhinagar, Gujarat.
Click to find out more about All You Need To Know About SGX Nifty becoming Gift Nifty and How Has Gift Nifty Perform After Transitioning from SGX Nifty.
Can International Traders Trade GIFT Nifty through SGX?
The short answer is yes, international traders can trade GIFT Nifty through SGX.
According to OutlookIndia, SGX IFSC India Connect has been set up to help facilitate trading and execution. It serves as a special-purpose vehicle company of SGX to direct all international trade orders to NSE IX. The trades executed will be cleared and settled through NSE IFSC Clearing Corporation (NICCL), while SGX-DC will serve as the central counterparty for SGX clearing members.
As per NSE IX, registered or non-registered traders, from India or abroad, can participate in GIFT City Nifty trading by establishing their office through a subsidiary and obtaining NSE IX membership.
Traders can trade GIFT Nifty through Orient Futures International Singapore. Orient Futures Singapore holds membership at the Singapore Derivatives Exchange (SGX-DT), which makes it accessible for traders to do futures trading under SGX.
SGX Nifty 50 Index Futures Contract Specifications
The SGX GIFT Connect Nifty Futures Contract has the following specifications:
The SGX GIFT Connect Nifty Futures Contract has a minimum price fluctuation of:
Screen Trading: 0.5 index points, Non-Leading Month Trading: 0.01 index points.
Contract months are on March, June, September, and December.
The last trading day of the last Thursday of the Expiry Month.
SGX GIFT Connect Nifty Futures symbol: NIFTY
Trading Hours for SGX Gift Nifty
The SGX GIFT Nifty trading hours will be open in two sessions and will be accessible for almost 21 hours.
One session is from 6:30 am to 3:40 pm, while the second session is from 4:35 pm to 2:45 am.
Compared to SGX Nifty, which traded for 16 hours from 6:30 am to 10:30 pm, the expanded timings of SGX Gift Nifty offer greater overlap with trading hours in Asia, Europe, and the US.
SGX Gift Nifty Performance in 2024
Figure 1. SGX Gift Nifty Prices from Oct 2023 to Mar 2024 from Trading View
According to Livemint, the GIFT Nifty 50 has been rising since the start of the year, reaching a record high price of 21,928.25 on March 15, 2024. Alongside the GIFT Nifty 50, the Sensex, another Indian market index, also hit an all-time high of 72,720.96 on the same day.
Livemint reported that the strong gains in the Indian stock market indices were attributed to the stellar performance of IT giants such as Infosys and TCS.
The report added that the green shoots of recovery in the IT sector, driven by an improved outlook for BFSI in FY25, positively influenced market sentiments. The robust performance of PSU banking stocks is underscored by the inherent synergy between their loan portfolios and the prevailing business cycle.
SGX GIFT Nifty Market Outlook
According to Livemint, the positive surprise in India's GDP growth for the December quarter at 8.4% is seen as setting the stage for an earnings upgrade.
The report stated that driven by the investment rate, real GDP growth for Q3FY24 was much higher (8.4% YoY) than consensus estimates, thereby resulting in a consensus upward revision to FY24 GDP. This could potentially lead to upward earnings revisions – such expectations have begun egging stock prices on, which are already stretched in terms of valuations, thereby thinning the 'margin of safety.'
Livemint anticipates that upward growth revision is likely to continue emanating from cyclical and capital-intensive sectors, resulting in their outperformance. Their one-year forward (March 2025) target for Nifty 50 stands at 24,800, implying a 10% upside against the long-term expected returns of around 14%.
They also noted that over the past year, the aggregate earnings forecasts for the cyclical and capital-intensive sectors have been revised upwards for FY24/FY25, while those of the defensive sector have been downgraded.
Visit Orient Futures Singapore’s blog for the latest futures and forex trading Singapore news. Orient Futures Singapore is a MAS Regulated Forex broker.
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