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Last updated: 09/01/2024, 9:15AM

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Gift Nifty

What is Gift NIFTY?

Gift Nifty is the rebranded version of SGX Nifty, which was traded on the Singapore Stock Exchange and tracked the performance of India's Nifty 50 index. On July 3, 2023, SGX Nifty was moved to the NSE International Exchange (NSE IX) in Gandhinagar, India, and renamed Gift Nifty.

Why was SGX Nifty moved to Gift Nifty?

SGX Nifty was a popular way for foreign investors to bet on the Indian stock market. It was a derivative product based on the NSE Nifty index, which allows investors to buy or sell contracts that predict the future price of the index. However, SGX Nifty was discontinued on the Singapore Stock Exchange on July 3, 2023. The move was made to attract more foreign investment into India and to create a more liquid market for Nifty derivatives Gift City offers a number of advantages for foreign investors, including a tax-free environment and a well-regulated financial market.

What are the differences between SGX Nifty and Gift Nifty?

The main difference between the two is that Gift Nifty is traded on the NSE IX, while SGX Nifty was traded on the Singapore Stock Exchange. This means that Gift Nifty is subject to Indian regulations, while SGX Nifty was subject to Singapore regulations. Another difference is that Gift Nifty has longer trading hours than SGX Nifty. Gift Nifty is traded for 21 hours a day, while SGX Nifty was traded for 16 hours a day.

What are the differences between Nifty 50 and Gift Nifty?

The main difference between Gift Nifty and Nifty is that Gift Nifty is traded in US dollars, while Nifty is traded in Indian rupees. This makes it easier for foreign investors to trade in Gift Nifty Other than the trading currency and trading hours there are no other fundamental differences between Gift Nifty and Nifty. The prices of Gift Nifty and Nifty are closely correlated, and they tend to move in the same direction.

What is trading hours for Gift Nifty?

The trading hours of Gift Nifty are:

  • Morning session: 6:30 AM to 3:40 PM IST
  • Evening session: 4:35 PM to 2:45 AM (Next day) IST

This means that Gift Nifty is traded for 21 hours a day, 5 days a week. The morning session overlaps with the trading hours of the National Stock Exchange of India (NSE), while the evening session overlaps with the trading hours of the New York Stock Exchange (NYSE). The trading hours of Gift Nifty were designed to provide investors with a more flexible and convenient way to trade the Nifty index. The extended trading hours allow investors to trade Gift Nifty during US market hours, which can be beneficial for investors who are looking to hedge their exposure to the Indian rupee or who want to take advantage of arbitrage opportunities between the Indian and US markets

How can I trade Gift Nifty?

NSE IX states that any trading member, whether Indian or foreign, registered or unregistered, establishing an office through a subsidiary or branch model, is eligible to trade in Gift Nifty goods by becoming a member of NSE IX. Currently, the Gift city is home to more than 50 brokers who have established offices there. These trading participants are allowed to conduct a transaction on both their own accounts and the accounts of their customers. However, Indian individual investors won't be able to access the Gift Nifty under the Liberalized Remittance Scheme (LRS). According to LRS, the RBI forbids leveraged traders from using the $250,000 per person per year for futures and options.

Gift City

Gujarat International Finance Tec-City (Gift City) is a central business district under construction in Gandhinagar district in Gujarat, India. It is India's first operational greenfield smart city and international financial services center, which was pitched as a greenfield project by the Gujarat government.

Impact and Benefits of Gift nifty

Impacts :

  • Increased liquidity: Gift Nifty is expected to attract more liquidity from foreign investors, as it is now traded in India and is subject to Indian regulations. This could lead to more volatility in the Indian stock market, but it could also make it easier for investors to trade the Nifty index.
  • Reduced reliance on SGX: The transition of SGX Nifty to Gift Nifty will reduce India's reliance on Singapore for derivatives trading. This could give India more control over its financial markets and make it more attractive to foreign investors.
  • Boost to Gift City: The success of Gift Nifty could help to boost the development of Gift City as a global financial hub. This could attract more foreign investment and create jobs in India.

Benefits :

  • More tax benefits for foreign investors: Foreign investors who trade Gift Nifty will be eligible for a number of tax benefits, including exemptions from Securities Transaction Tax (STT), commodity transaction tax, dividend distribution tax, and capital gains tax. This could make India a more attractive destination for foreign investment.
  • More efficient risk management: Gift Nifty can be used by investors to hedge their exposure to the Indian stock market. This could help to reduce volatility in the market and make it more attractive to foreign investors.
  • Improved transparency: Gift Nifty will be traded on the NSE IFSC platform, which is subject to Indian regulations. This will improve transparency and reduce the risk of manipulation.
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