If you have ever followed Indian stock markets closely, you may have come across the term SGX Nifty. For many years, this was a popular way for international investors to gain exposure to Indian equities without directly trading on the National Stock Exchange (NSE). SGX Nifty stood for the Singapore Exchange Nifty futures contract, based on India’s Nifty 50 index.
Key Takeaways:
- SGX Nifty was a futures contract based on India’s Nifty 50 index, but traded on the Singapore Exchange, giving global investors exposure to Indian equities.
- It became popular for accessibility, especially for international investors who could not register directly with Indian exchanges.
- Longer trading hours (16 hours a day) made it a useful tool for reacting to global events and for predicting NSE’s opening trends.
- Key differences included currency (USD for SGX Nifty vs INR for NSE Nifty), exchange location (Singapore vs India), and access rules.
- In July 2023, SGX Nifty transitioned to GIFT Nifty, shifting trading to India’s GIFT City under NSE IFSC to boost liquidity, transparency, and domestic oversight.
What Was SGX Nifty?
SGX Nifty was a futures contract linked to India’s benchmark Nifty 50 index, but traded on the Singapore Exchange.
- The word Nifty referred to the NSE’s main stock index made up of 50 leading Indian companies across sectors like banking, IT, energy, and FMCG.
- The word SGX referred to the Singapore Exchange, where the product was listed and traded.
Why Was SGX Nifty Popular?
1. Accessibility for Global Investors
Not all foreign investors could directly register with Indian exchanges. SGX Nifty provided an indirect route for them to take positions linked to Indian equities without dealing with regulatory hurdles.
2. Longer Trading Hours
While NSE operated from 9:15 AM to 3:30 PM IST, SGX Nifty traded for nearly 16 hours a day, from 6:30 AM to 11:30 PM IST. This gave global traders flexibility and allowed them to react to news and global events outside Indian market hours.
3. Early Indicator of Indian Market Trends
Since trading on SGX started much earlier than NSE, SGX Nifty became a leading indicator of how Indian markets might open. For example, if SGX Nifty was trading higher in the morning, it often suggested a positive opening for the NSE Nifty.
SGX Nifty vs NSE Nifty
| Feature | SGX Nifty | NSE Nifty (India) |
| Exchange | Singapore Exchange (SGX) | National Stock Exchange (NSE) |
| Product Type | Nifty 50 Futures | Cash market & Futures contracts |
| Trading Hours | 16 hours (6:30 AM–11:30 PM IST) | 9:15 AM–3:30 PM IST |
| Access | Global investors without NSE registration | Investors registered in India |
| Currency | USD | INR |
Transition from SGX Nifty to GIFT Nifty
In July 2023, trading in SGX Nifty was officially shifted to GIFT City (Gujarat International Finance Tec-City) in Gandhinagar, India.
The new product, called GIFT Nifty, was launched and managed by NSE IFSC (International Financial Services Centre).
The move aimed to:
- Bring global derivatives trading back to India
- Boost liquidity in GIFT City, which the government is promoting as a global financial hub
- Ensure better alignment of international trades with domestic regulatory frameworks
Importance of SGX Nifty for Traders
- Predictive Value SGX Nifty gave traders an early sense of market sentiment before NSE opened, helping them plan trades in advance.
- Global Link It connected Indian equities with the international investor community, making India a part of the global trading network.
- Risk Management As SGX Nifty was traded in USD, it helped investors hedge against both equity movements and currency fluctuations.
Why Was It Replaced?
The shift from SGX Nifty to GIFT Nifty in July 2023 was driven by India’s aim to bring offshore trading back within its borders. For years, a significant share of trading in Nifty futures happened in Singapore, which meant tax revenue and market liquidity were diverted away from India.
Moving the contracts to GIFT City ensured that these benefits remained within the country. It also allowed Indian regulators to exercise better oversight and improved transparency and at the same time, the move boosted GIFT City’s role as an emerging international financial hub.
Conclusion
SGX Nifty played an important role for nearly two decades as a bridge between India’s stock markets and global investors. It provided accessibility, long trading hours, and acted as a barometer for Indian market openings.
With its transition to GIFT Nifty in 2023, the trading of Indian derivatives is now more closely tied to India’s financial ecosystem. While SGX Nifty no longer exists, its legacy remains as a key chapter in India’s journey towards integrating with global capital markets.
FAQs
What is SGX Nifty?
SGX Nifty was a futures contract of India’s Nifty 50 index traded on the Singapore Exchange. It allowed global investors to trade Indian equities without direct NSE access.
How is SGX Nifty different from NSE Nifty?
SGX Nifty was traded in Singapore in US dollars, while NSE Nifty is traded in India in rupees. NSE offers both cash and derivatives trading, unlike SGX Nifty which was only futures.
Who benefited from SGX Nifty?
Global investors who could not register in India benefited the most. Indian traders also tracked it to gauge likely market openings.
When was SGX Nifty used?
It was mainly used before Indian markets opened, as a trend indicator. Investors also used it for hedging positions in Indian stocks.
Were there any limitations to SGX Nifty?
Yes, it only offered futures contracts and was not accessible for cash equity trades. Also, with the transition to GIFT Nifty, it no longer operated on SGX.
Why does SGX Nifty matter now?
Even after the shift to GIFT Nifty, traders still refer to SGX Nifty because of its historical role. It highlighted how global investors tracked Indian markets.
