How SGX Nifty impacts the Indian Stock Markets

What is SXG Nifty and how it impacts the Indian stock market: An active stock market investor/trader would definitely be heard the term ‘SGX Nifty’ or “Singapore Nifty” on a regular basis. Open any business news channel the first thing in the morning ahead of the market pre-opening period all you will see is an hour-long discussion on SGX Nifty and its impact on the opening of Nifty that day.

The importance of understanding the term can be seen in the fact that it is one of the most popular hashtags followed or searched on various social media platforms such as Twitter/Facebook if one wants to have a better image of the Indian Equity market. In this blog, we will discuss what is SGX nifty, some details about it and how it affects the Indian stock market.

The name SGX is the short form of the Singapore Stock Exchange. In addition, Nifty is a benchmark index of the National Stock Exchange (NSE) of India and has the top 50 companies listed on the NSE. In short, when Indian Nifty trades on Singapore Stock Exchange we call it SGX Nifty or Singapore Nifty. It is a futures contract for sale on the Singapore Exchange.

SGX Nifty live chart

Just like any other scrip, you can also do an analysis of the SGX Nifty live chart. The best charting platform I have come across is Tradingview.com. On this platform, you can get the live charts, live price, analysis, experts comments, and news click here to know more on Tradingview.com

If you are a trader and want to do an analysis on Singapore Nifty you can also follow its historic carts, You will get major trading levels of Nifty by following monthly and weekly charts of Singapore Nifty. You can also read the Daily morning stock market report on our website every morning at 8 am IST, where we analyze the latest stock market news, global market updates including the Singapore Nifty trend.

SGX

Who can trade in SGX Nifty or Singapore Nifty?

Any investor/trader interested in trading with Nifty but does not have access to the Indian markets finds Singapore Nifty investing as an alternate option to trade. Even large FIIs/FPIs with high exposure in the Indian market sometimes take positions in Singapore Nifty for hedging their positions.

An Indian citizen is not allowed to trade in SGX Nifty futures contracts as Indian citizens are not allowed to trade in derivative products in any other country.

The difference between SGX Nifty & Nifty

Singapore Nifty is Nifty future contract trading in Singapore Stock Exchange whereas Nifty contract trades on NSE.in India.

Nifty trades for 6.5 hours on NSE from 9 AM to 3.30 PM as per (IST) whereas SGX Nifty futures trade for 16 hours from 6.30 AM to 11.30 PM (IST) 

SGX Nifty futures contract size is different as compared to Nifty. In Nifty, we have 75 shares in a lot of the entire Nifty contract, and Singapore nifty does not have a shareholding contract in it. It trades in US dollars. Say, if Nifty trades at 15000, the SGX Nifty futures contract size will be 15000 * (2 USD) that is, 30,000 USD.

Now, in India, in the case of Nifty, we see Open Interest as the dominant ‘stock price’. But in the case of Singapore Nifty Open Interest shows a significant ‘number of contracts’. Both Nifty and Singapore Nifty is very liquid and very high volume trading takes place in that.

SGX Nifty Trading Time

The SGX Nifty opens at 8 AM Singapore time and trades 16 long hours from Monday to Friday. The Nifty trades on NSE for 6.5 hours from 9 AM to 3.30 PM (IST) on all trading days. As per Indian Standard Time ( IST) Singapore Nifty is trading from 6,30 AM to 11.30 PM in two slots. The evening slots consider for the next day settlement period.

Since Singapore Nifty trades for long hours, it can easily capture global trends and events when Indian markets are not working. The index is very popular and considered a good indicator to know how Indian markets will open on a particular day.

Contract Settlement at SGX Nifty

SGX Nifty has two consecutive monthly contracts and has quarterly contracts. The contract expires on the last Thursday of the entire month which ends and if last Thursday is an Indian holiday, it expires on the last business day. SGX Nifty contracts are cash-settled and the final settlement price is derived from the official closing of S&P CNX Nifty.

Why SGX Nifty is important for the Indian Stock Market?

We all know that global events impact the domestic markets for e.g if there is an FOMC meeting scheduled on the previous night, the positive outcome of the meeting will have optimistic market sentiments across the globe the next day. Similarly, any such global events either positive or negative outcomes impact other global financial markets.

Singapore nifty trades 16 hours, even after closure of the Indian Nifty market, we can see the impact of this global news on the price movement of Singapore Nifty. This continues to directly affect the Nifty opening prices, the next day. And that is one of the reasons why we see that the Indian benchmark index Nifty is opening at a premium or discount over the previous day’s closure.

Many market experts use Singapore Nifty as one of the prime indicators to predict the opening of Indian markets.

Conclusions: 

Singapore Nifty is a good indicator to know the Indian market trend. Because of its longer trading hours, the impact of global market events already gets adjusted in its price movement. Indian investors/traders track its price movement to know the Indian stock market trends. It is advisable to track the SGX Nifty live price ahead of the Indian market opening to know the market trends.

You may also like to read,

Nifty50 Stocks list | Index | Share price 

Happy Investing !!

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