MUMBAI: The SGX Nifty began trading as GIFT Nifty today marking a significant shift for investors and traders looking for cues for the opening of Indian equities. The transformation of SGX Nifty into GIFT Nifty means that now the latter will serve as an early indicator of how Nifty is likely to open on any trading day.
SGX Nifty were the Nifty derivatives contracts traded on the Singapore Exchange (SGX). From today, trading in these contracts has now started to take place on Gujarat International Finance Tec-City (GIFT City) under a special arrangement between SGX and the National Stock Exchange (NSE).
After the start of trading in GIFT Nifty, the turnover generated in the offshore market earlier, will now be generated onshore in Gujarat’s Gift City.
All derivative contracts worth $7.5 billion, which were earlier traded in Singapore, will shift to GIFT City.
Industry experts expect GIFT Nifty to have daily volumes of $1.5 billion to $2 billion.
However, there will not be any significant impact on retail traders and investors as it is just a migration from one stock exchange to another. From now on, all the trades emanating from SGX will be routed and executed at Gift City.
The GIFT Nifty will have two sessions of trading from today. The first one will start at 6:30 am Indian Standard Time (IST), and continue till 3:40 pm IST. The second session will begin from 5 pm IST and continue till 2:45 am IST.
Nifty contracts traded on the NSE are denominated in rupees, while those on the GIFT Nifty are denominated in US dollars.
The move will further strengthen the position of GIFT City as a new financial hub, which the government intends to develop as a competitor of other global financial centres like Dubai, Mauritius, and Singapore.
Stock exchanges functioning in the GIFT City are allowed to offer trading in securities in any currency other than the Indian rupee. the NSE International Exchange (NSE IX), which started operating in 2017, offers dollar-denominated trading in various products.
Investors will have access to four products under the GIFT Nifty umbrella brand - Gift Nifty 50, Gift Nifty Bank, Gift Nifty Financial Services, and Gift Nifty IT derivative contracts.