Introduction:

India is one of the fastest-growing economies in the world. The confidence of investors in the Indian growth story can be gauged from the peaks the Sensex and Nifty have touched in recent times. Among the several steps taken to make India a global financial centre, the SGX Nifty, which earlier had its base in Singapore, was shifted to Gandhinagar in Gujarat last year in July. Not just that, it was renamed as GIFT Nifty.

What is GIFT Nifty?

GIFT Nifty is the new avatar of the SGX Nifty, used by traders and investors to gauge market sentiments. In its earlier form, the SGX Nifty was based on the Singapore Exchange. With the formation of GIFT Nifty, its base has been shifted to the NSE International Exchange (NSE IX) in GIFT City of Gujarat’s Gandhinagar. Post this shift, it has been renamed as GIFT Nifty. The derivatives contract on the SGX Nifty got converted into GIFT Nifty positions from July 3, 2023.

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GIFT Nifty launch date

GIFT Nifty has etched its name in the history of Indian capital markets by becoming the first cross-border initiative between Singapore and India’s capital markets. Its launch date was July 3, 2023. The transition happened after regulatory approvals from the International Financial Services Center Authority (IFSCA) and the Monetary Authority of Singapore (MAS).

GIFT Nifty Timings

GIFT Nifty has two trading sessions. The first trading session is from 6:30 am to 3:40 pm. The second trading session is from 4:35 pm to 2:45 am the next morning, as per IST. The combined GIFT Nifty Timings are more than the SGX Nifty, which used to trade from 6:30 am to 10:30 pm. The new timings of GIFT Nifty mean that it will overlap with the trading hours of the US, European and Asian markets.

Benefits of trading GIFT Nifty

Some of the major benefits you get as a trader with GIFT Nifty are as follows:

• Extended trading hours

GIFT Nifty allows you to benefit from extended trading hours. As against the earlier SGX Nifty, which traded for 16 hours, GIFT Nifty is traded for nearly 20 to 21 hours. This gives you more opportunities to trade. Also, with seamless integration of its trading window with major financial hubs in Asia, the US and Europe, GIFT Nifty allows you to react swiftly to international market development.

• Single liquidity pool

GIFT Nifty is seamlessly integrated into a unified liquidity pool. It fosters a more efficient marketplace and will also enhance price discovery mechanisms. By consolidating trading activities into one pool, GIFT Nifty creates a dynamic environment where buyers and sellers can seamlessly interact, thereby leading to a more accurate reflection of market prices.

Also, with trading activities streamlined through a singular pool, the friction with fragmented markets goes down by several notches. With it, you can benefit from a more cost-effective ecosystem.

• Provides a high level of certainty

GIFT Nifty will operate with an established regulatory framework overseen by the IFSCA. By adhering to the guidelines and regulations set by IFSCA, GIFT Nifty provides you with a robust and secure trading environment, thus instilling a high level of confidence.

The framework encompasses comprehensive guidelines for disclosure requirements, trading practices and risk management protocols. You can take solace in the fact that GIFT Nifty’s operations are conducted in a structured and monitored environment, thereby reducing the likelihood of market manipulation and fraudulent activities. Adherence to IFSCA regulations contributes to GIFT Nifty's reputation as a reliable and credible financial instrument with its commitment to upholding standards of compliance and governance.

Different types of GIFT Nifty contracts

The different types of GIFT Nifty contracts are as follows:

• GIFT Nifty 50

It’s the most popular contract which tracks the Nifty 50 index.

• GIFT Nifty Bank

It tracks the Nifty Bank Index, consisting of India's 12 largest banks.

• GIFT Nifty Financial Services

It tracks the Nifty Financial Services index. This index comprises the 25 largest Indian financial services companies.

• GIFT Nifty IT

It tracks the Nifty IT Index, consisting of India's 25 largest financial services companies.

To conclude

GIFT Nifty encourages foreign investors to invest in India’s derivatives market, and the proximity between Singapore and India results in better connectivity. GIFT Nifty will make India globally competitive with the financial hubs of developed economies. With Motilal Oswal, you can open a free Demat account and invest in the equity markets seamlessly.

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