Key takeaways
- SGX Nifty is a futures contract that is traded on the Singapore Exchange (SGX).
- SGX Nifty is traded in Singapore dollars, but it is closely correlated to the Nifty index, which is traded in Indian rupees.
- This makes SGX Nifty a popular instrument for investors who want to trade the Indian stock market without having to physically go to India.
What is SGX Nifty?
SGX Nifty, or Singapore Exchange Nifty, is a popular derivative of India’s CNX Nifty, traded on the Singapore Stock Exchange (SGX). It allows foreign investors, including FIIs, to invest in the performance of the Indian stock market without directly trading in India. While Indian stocks aren’t available on SGX, futures products like SGX Nifty Futures enable investment in Nifty Futures. As an offshore instrument, SGX Nifty offers global investors a way to access the Indian market through futures trading based on the NSE Nifty index.
What is the SGX Nifty opening time?
SGX Nifty, which tracks the NSE Index, is settled based on the closing price of the S&P CNX Nifty in India. It offers two types of contracts with different settlement periods and trading timings:
E – SGX QUEST (T) Settlement: Same-day settlement, trading from 9:00 AM to 6:15 PM Singapore time (6:30 AM to 3:45 PM IST), Monday to Friday.
E – SGX QUEST (T+1) Settlement*: Next-day settlement, trading from 7:15 PM to 1:00 AM Singapore time (4:45 PM to 10:30 PM IST), Monday to Friday.
These flexible timings enable global traders to access SGX Nifty even after Indian markets close, as Singapore is 2.5 hours ahead of India. With trading hours from 6:30 AM to 11:30 PM IST, SGX Nifty offers a longer window than Indian markets, providing increased liquidity and enhanced price discovery. Traded in Singapore Dollars (SGD), SGX Nifty also allows investors to hedge against foreign currency risk while investing in Indian equity futures.
How does SGX Nifty work?
The Singapore Stock Exchange Nifty (SGX Nifty) is a derivative contract that tracks the performance of the Nifty 50 index, a benchmark stock market index in India. The SGX Nifty market opens approximately two hours before the NSE (National Stock Exchange of India) market. Due to the high correlation between the two markets, the movement of the SGX Nifty can be used as an indicator for the opening direction of the Indian stock market. This time difference allows Indian financial institutions and advisory services to analyze the SGX Nifty and provide pre-market trading recommendations for the Nifty 50. Additionally, the geographical proximity of India and Singapore further strengthens the interconnectedness of these markets, as investor sentiment often transcends geographical borders and influences market movements in both countries.
SGX Nifty futures
The Singapore Nifty is a futures contract derived from India's National Stock Exchange (NSE) Nifty 50 index. This derivative instrument facilitates global investors in hedging their exposure to Indian equities, engaging in speculative trading, and participating in the Indian stock market even outside of NSE's trading hours. Consequently, the SGX Nifty presents a compelling avenue for international traders seeking to invest in the Indian equity market without the necessity of registering with Indian regulatory authorities.