Transforming Indian Stock Market: SGX Nifty's Evolution into GIFT Nifty

India's financial landscape undergoes a historic shift today as the SGX Nifty transforms into the GIFT Nifty, promising greater opportunities and global impact!

Evolution into GIFT Nifty
  • GIFT City's boost: $7.5B derivative contracts to shift!
  • GIFT City emerges as India's premier financial hub.
  • GIFT Nifty expands market accessibility with increased trading hours. 
  • India's market independence is no longer dictated by international prices.

In a groundbreaking move to India's global trading landscape, the renowned SGX Nifty will be reintroduced as GIFT Nifty starting today, July 3. This transition will see all derivative contracts worth $7.5 billion, previously traded in Singapore, shift to India.

What are the four products included in GIFT Nifty?

Under the umbrella brand of GIFT Nifty, there will be four products, namely, GIFT Nifty IT derivative contracts, GIFT Nifty Financial Services, GIFT Nifty Bank, and GIFT Nifty 50. 

Why is this transformation monumental?

V Balasubramaniam, the MD and CEO of NSE International Exchange, hails this move as a “watershed moment in the history of India.” For the first time, India will have an international contract that was previously traded outside the country, enhancing India's status in the global trading arena.

How does this transformation benefit GIFT City?

GIFT City, located in Gandhinagar, Gujarat, has emerged as India's first international financial centre. RBI removed FEMA restrictions there in 2015. This shift, along with the SGX-Nifty partnership, is expected to boost Indian bourses' revenue in the current fiscal year. SGX used to generate significant income from Nifty derivative contracts, thanks to increased fees and trading volumes.

Also Read - Can GIFT City put India in the league of global financial hubs such as Singapore?

What is the nature of the partnership between SGX and Nifty?

SGX has announced that, in accordance with the liquidity switch, all the open positions in SGX Nifty will be moved to NSE IFSC Nifty. The agreement between SGX and Nifty entails a cost and revenue-sharing arrangement of roughly 50-50. Further, futures and options trading will be conducted in GIFT City, while SGX will handle clearing processes.

How does the trading time differ between the SGX Nifty and the GIFT Nifty?

Currently, SGX Nifty functions for 16 hours, starting from 6:30 a.m. IST until 10:30 p.m. IST.

GIFT Nifty's operational hours have been expanded from 4 a.m. IST to 2 a.m. IST the next day. Following the change, the NSE IFSC will be the sole trading platform for Nifty derivatives contracts with US dollar denominations.

What impact will this have on the Indian market?

Previously, the SGX Nifty served as an early indicator of the Indian market. However, starting today, GIFT Nifty will take on that role. The shift in focus means that the Indian equity markets will no longer be guided solely by international prices. Instead, the GIFT Nifty will become the new barometer for the Indian market.

How does this transformation expand the reach of Indian markets among global investors?

The NSE IFSC-SGX Connect strengthens the engagement of global investors with the Indian capital markets, particularly those who were not directly involved before. Additional efforts, such as sponsored depository receipts and unsponsored depository receipts (UDR) of Indian stock, are being explored to facilitate global market participation further.

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Also Read - GIFT City Offerings: HNI investors can add new investment avenues to their portfolio.



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