What is SGX Nifty?
SGX is the Singapore Stock Exchange. The top 50 businesses listed on the NSE form Nifty, the benchmark index of the Indian National Stock Exchange (NSE). So SGX Nifty is a futures contract for the Nifty 50 index.
It allows investors outside of India to bet on the direction of the Indian stock market before Indian markets open for trading. It is traded during non-Indian market hours.
SGX Nifty provides a way for investors to speculate on the opening levels of the Indian stock market based on various factors such as global market trends and economic news.
Benefits of the SGX Nifty
Early Signal: Traders closely watching the trends on SGX Nifty are better informed about the trends in the Nifty 50 index. This information assists investors in hedging their positions in the Indian market.
Extended Trading Hours: SGX Nifty provides extended trading hours, allowing investors to trade the Nifty 50 index almost 24 hours a day. This gives them more flexibility and opportunities to trade according to global market movements.
Access for Foreign Investors: SGX Nifty encourages participation from international investors who want to invest in the Indian equity market but are not able to do so due to regulatory or logistical constraints. SGX Nifty also helps ensure tighter spreads and a smoother trading experience due to enhanced liquidity.
How is SGX Nifty different from Indian Nifty?
How is SGX Nifty different from Indian Nifty?
SGX Nifty and Indian Nifty are both indexes that track the performance of the top 50 companies listed on the National Stock Exchange (NSE) of India. However, they differ in several ways:
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Trading Platform: SGX Nifty is traded on the Singapore Exchange (SGX), while the Indian Nifty is traded on the NSE in India.
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Contract Size: The contract size for SGX Nifty is denominated in US dollars and does not have a specific number of shares per contract. In contrast, the Indian Nifty is traded in contracts or lots of 75 shares each.
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Availability: SGX Nifty is available for international investors who cannot access the Indian stock markets, but it is not available for trading to Indian investors due to restrictions on trading derivatives listed on foreign exchanges.
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Purpose: SGX Nifty allows investors to take positions on the Nifty index outside Indian market hours and can be used as a tool to predict the opening trends of the Indian stock market.
These differences make SGX Nifty a useful instrument for international investors looking to gain exposure to the Indian market and for hedging purposes.
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