SGX Nifty: How does it affect my Trading?

As a beginner in Stock Market, many of you might have heard the term ‘SGX Nifty‘. Most of the TV analysts and online business websites dig into SGX Nifty charts to predict the opening of market. In this, article we would understand  SGX Nifty in detail  and learn its significance on Indian and world markets.

What is SGX Nifty?

SGX Nifty, also known as Singapore Nifty is a derivative product of Indian Nifty index officially traded in Singapore stock exchange. The movement of SGX Nifty is highly correlated to Indian Nifty index. Its important to understand that not all stocks that Nifty comprises of is traded in SGX. Singapore stock exchange is one of the leading stock exchange in Asia, and apart from Indian Nifty it also provides flexibility trading on other important indices of the world.

Importance of SGX Nifty

Nifty Contracts on SGX is traded for 16 hours as compared to 6~ hours trading in NSE. This gives international investors flexibility to trade without any timezone constraints. Also, Singapore being a very flexible market offers a good deal visibility for Indian stocks through SGX Nifty. Investors who are unable to access Indian markets, but who want to take an exposure in Indian market trade in SGX Nifty. For domestic investors at India, SGX Nifty gives a very good indication on where the market will open as trading in SGX starts around 3 hours before NSE. The developments that take place and have a bearing on the Indian markets get factored into SGX nifty, even when Indian markets remain closed, give a sense of what is to expect when trade resumes in Indian market. Arbitrage opportunities are also available.The presence of SGX NIFTY also challenges Indian policy makers in so many ways, like ease of doing business there, cost of transactions, integration of financial markets, sensitivities attached therein, and also issue of bypassing Indian markets if we are lagging behind.

SGX Nifty Live Charts

You would not find symbol of SGX Nifty in any of the popular finance portals like Yahoo, Investing etc. The best way to track price movements in SGX Nifty is through one of the below links:

SGXNifty.org

SGX Nifty Live Charts

Here are some of the screenshots:

SGXNifty Price

SGXNifty Chart

Future of SGX Nifty

As per Economic Times sources, soon futures contracts on sector-specific Indian indices will be available for trading in Singapore. The Singapore Exchange (SGX) will soon list dollar-denominated index futures contracts namely, SGX Nifty Bank , SGX Nifty IT , SGX Nifty CPSE and SGX Nifty Midcap 50. This is the first time such derivative contracts are being made available outside India. The Singapore-based bourse already offers SGX Nifty 50 Index Futures, which is quite popular among international market participants looking to gain off-shore exposure to the Indian benchmark index. Volumes of SGX Nifty 50 Index Futures rose 30 per cent year-on-year during 2015 to $360 billion. SGX’s rupee-dollar futures contract is also SGX’s most-active forex futures with more than $750 million worth of notional trades a day. The SGX Nifty IT Index Futures and SGX CPSE Index Futures will be launched on March 29, followed by SGX Nifty Bank Index Futures and SGX Nifty Midcap 50 Index Futures in mid-2016. The introduction of sector index futures contracts will deepen SGX’s Indian product offering and will provide off-shore investors access to specific trading opportunities in the key growth sectors of the world’s fastest growing economy, according to a statement from NSE.

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