What is GIFT Nifty?
The Gujarat International Finance Tec-City Nifty, also known as the GIFT Nifty, is a derivative contract within India’s financial landscape. It was initially traded on the Singapore Stock Exchange (...
The Gujarat International Finance Tec-City Nifty, also known as the GIFT Nifty, is a derivative contract within India’s financial landscape. It was initially traded on the Singapore Stock Exchange (SGX). It consists of companies listed on the National Stock Exchange (NSE) in the GIFT City in Gujarat, an international financial services centre.
The shift of GIFT Nifty to the NSE International Exchange in Gandhinagar, India, has marked a significant shift in the Indian financial market. GIFT Nifty acts as a benchmark for tracking the performance of these companies and further offering insights into the overall market trends within the GIFT City framework.
Traders actively engage with GIFT Nifty to find future directions of the Nifty 50 index. Operating during regular market hours following the Nifty index’s trading timings enables assessment of companies’ performance within GIFT City, facilitating informed investment decisions.
Most of the index moves in tandem with the Nifty index. However, the India VIX displays a negative correlation with the NIFTY index. When the India VIX decreases, the NIFTY rises, and when the India VIX goes up, typically, the NIFTY drops down.
Upon acquiring NSE IX membership, any investor, whether foreign or Indian, registered or unregistered, is allowed to actively trade in the GIFT Nifty Index products.
The SGX Nifty has a significant impact on the Indian market, offering a valuable tool to track and forecast movement in the Nifty index. The time of the two indices leverages investors with the GIFT monitoring to stay informed about market dynamics, thus gaining insights into the whole trading process.
Timings of GIFT Nifty:
The GIFT Nifty timings are important as they have a major impact on market participants. The alignment of GIFT Nifty timings with the global market helps investors make an informed decision while trading. The GIFT Nifty has two trading sessions: the first trading session is from 6:30 am to 3:40 pm, while the second trading session is from 4:35 pm to 2:45 am the next morning.
The combined GIFT Nifty timings are more than the SGX Nifty, which used to trade from 6:30 am to 10:30 pm. The new timings of GIFT Nifty overlap with the trading hours of the US, European, and Asian markets. This timing allows the index to sync with the domestic market and provide investors with real-time price movements and trading opportunities..
The different trading timings of both indices have some implications. Firstly, it allows investors to exploit arbitrage opportunities between the two markets by leveraging price discrepancies during overlapping trading hours.
How to Trade in GIFT Nifty?
Trading in GIFT Nifty involves major risks and is not suitable for all investors. It is always better to invest capital that is affordable to lose. Further, below are some steps to trade in the GIFT Nifty to make your trading successful:
Open a Trading Account: Choose a broker registered with the NSE IX. Popular options include Motilal Oswal, BlinkX, and Zerodha. These brokers offer dedicated GIFT trading accounts.
Complete KYC (Know Your Customer): To complete KYC, you must submit identity and address proofs per the broker’s regulations.
Fund Your Account: Deposit funds in the required currency, such as USD, and EUR, among others, as per the broker’s guidelines.
Monitor and Manage your position: Keep track of positions and manage them as needed until expiry or settlement.
Understand the Risks: Futures contracts involve inherent leverage, which can pacify profits and losses. Ensure you have a proper understanding of the risks involved before trading.
Eligibility for GIFT Nifty Trading
Retail investors residing in India are banned from trading in the GIFT Nifty due to foreign exchange regulations.
NRIs, foreign portfolio investors (FPIs), and eligible foreign investors (EFIs) are eligible to trade through a broker who is a member of the NSE IX.
Conclusion.
GIFT Nifty index encourages foreign investors to invest in the Indian derivatives market. It will make India globally competitive with the financial hubs of developed economies.
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