SGX Nifty: What is SGX Nifty, Who Can Trade, Benefits

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.

Who can trade on the SGX Nifty?

Individual residents living in India are not allowed to do any trading in SGX Nifty.

Only foreign portfolio investors and others are allowed. NRI Indians are also allowed to trade in SGX Nifty.

For any investor who wants to trade Nifty but cannot access the Indian Markets, trading SGX Nifty is a viable option. In addition, even large hedge funds with significant exposure to the Indian market view SGX Nifty as a viable alternative for hedging their positions.

While Nifty trades on the NSE for 6.5 hours from 9:00 AM to 3:30 PM, SGX Nifty Futures trades for 16 hours from 6.30 AM to 11.30 PM (IST). This indicates that SGX Nifty Futures are traded before and after the Indian markets open.

SGX Nifty Futures may track global trends even when Indian markets are closed for trading because of their extended trading hours. Since the Singapore market starts 2.5 hours earlier than the Indian market, at 6.30 AM (IST), and is directly linked to the NSE market, the SGX Nifty trend can be used to predict the initial direction of the Indian stock exchange. As a result, many traders utilize it to forecast the movement of the Indian stock market. Depending on the movement of the SGX Nifty, the Indian stock market allows intraday traders to hold either long or short positions.

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