Gift Nifty: Meaning, Timing, Benefits and Performance

Gift Nifty Forecast Today (23-08-2024)

Trend – Positive

Previous Close: 24,817

Gift Nifty Resistance / Support

Resistance	R1	R2	R3
	24,847	24,883	24,931
Support	S1	S2	S3
	24,773	24,735	24,684

Gift Nifty Range
24,561		25,067

What Is GIFT Nifty?

The Gujarat International Finance Tec-City Nifty also referred to as GIFT Nifty is a novel idea in the financial structure of India. This entails firms that float their stock through the National Stock Exchange (NSE) in GIFT City which is an International Financial Services Centre in Gujarat.

These indexes provide reference points for the evaluation of the performance of such companies and provide information on the overall pace of this market within the GIFT City structure.

This means that through GIFT Nifty the investors and other participants in the Indian financial market must be able to decipher the changes and further progression of this financial city and it will assist them in making the right decisions as far as their investments are concerned. Functioning during normal market timing post the Nifty index, Sebi makes it possible to evaluate companies’ performances in GIFT City for making rational investment decisions in a marketplace.

Timings Of GIFT Nifty And SGX Nifty

The GIFT Nifty timings are relevant as they affect participants as well as synchronize themselves with other international markets. It is done during the normal business hours of the National Stock Exchange of India (NSE) being 09:15 IST to 15:30 IST. This timing enables the index to be in phase with the local market and offer actual prices and trading options for investors.

On the other hand, the Singapore Exchange (SGX) is open at different times. Singapore Nifty index futures, also known as the Nifty Singapore Exchange futures or SGX Nifty, are traded between 06:30 hours and 11:30 hours of the Singapore Standard Time (SST).

This is because the extended trading window allows participants across different time zones to trade on SGX Nifty contracts, and therefore it is a preferred product among global investors interested in investing in the Indian stock market.

However, there are certain effects due to the difference in trading hours of both indices. Firstly, it makes it possible for investors to take advantage of existing differences in prices between the two markets in relation to the overlapping trading time.

SGX Nifty to become GIFT Nifty

Paving the way for reforms in global trading of future and option contracts in India, the much popular SGX Nifty will now be christened as GIFT NIFTY from July 3 and all its future derivative contracts will be worth $7. Of shares worth $ 5 billion earlier listed in Singapore, the company will move to India.

The starting of the operation of GIFT NIFTY will be the first of the steps towards the relocation of the base Singapore Exchange to the NSE International Exchange at Gandhinagar, Gujarat.

The new capital created in Gujarat for the financial sector is known as the GIFT City which the government plans to make it rival other international financial cities of Dubai, Mauritius, and Singapore among others.

The recent move is planned to happen effectively after a five-year-old dispute with the National Stock Exchange of India Ltd was finally resolved recently. It has special reference to India’s trade market and Gujarat International Finance Tec (GIFT) city.

Benefits of SGX Nifty transformation into GIFT Nifty

The shift from SGX Nifty to GIFT Nifty was a big leap for India’s derivative marketplace. Such a change has untold advantages for domestic and international traders, which in turn enhances the accessibility, liquidity, and general efficiency within the stock market.

Let’s delve deeper into the key advantages of GIFT Nifty: Let’s delve deeper into the key advantages of GIFT Nifty:

1. Enhanced Accessibility

Earlier, SGX Nifty was largely used by foreign investors because it was based in the Singapore exchange market.

GIFT Nifty, however, fulfills this need by providing International investors with a platform in the domestic market. This does away with the location constraints and makes it easier for investors from other parts of the world looking to get a feel of the Indian market.

Also, the Indian investors get another familiar trading place that operates within the Indian regulatory systems.

2. Extended Trading Window

Thus, one of the major strengths of GIFT Nifty is that the trading hours of this stock exchange are much larger than those of the NSE.

The robust reason is that GIFT City functions in a different geographical time zone; hence the GIFT Nifty contracts can be traded for an extended period. This time window gives international investors a larger opportunity to invest and specifically target the market along with the changes in prices.

3. Centralized Liquidity Pool

Transition to GIFT Nifty promotes the prevalence of a more condensed amount of liquidity for the Nifty derivatives.

Earlier the trade process of the two intertwining stocks was conducted between the SEGI and NSE which might have impacted the stock price. Due to this, trading consolidation through GIFT Nifty increases the opportunities to achieve a tighter spread and a more efficient price discovery mechanism.

This helps all participants to get a better picture of the market trend that prevails hence a more accurate measurement of the market sentiment.

4. Robust Regulatory Framework

Sales and purchases in the NSE IX established in GIFT City expose GIFT Nifty to rules and laws enforced by the IFSC authority that have long been established.

Of course, such a solid framework gives more confidence and a more transparent environment to investors in performing transactions. Also, it enhances control and reduces the possible risks that stem from the operation of derivative financial instruments.

5. Potential for Growth

The entry of GIFT Nifty is considered a boon in the overall development of the Indian derivatives market. GIFT Nifty has the added advantage of possibly attracting a statistically larger number of domestic and international investors, so it can boost overall trading volume, specifically in the case of growth shares.

That in turn could elicit a more robust growth of the derivatives markets in India having the capacity to generate more innovations and additional inflows of capital.

Thus, as GIFT Nifty develops further, its presence could become a major asset to the future development of the Indian derivatives market.

How Will GIFT Nifty Benefit Investors?

Thus, investing in GIFT Nifty is advantageous for many reasons, such as better synchronization with domestic markets, greater accessibility, and an opportunity to achieve greater liquidity.

Firstly, in order to be in line with the National Stock Exchange of India trading timings it enables investors to be more active during specific trading times of the exchange. By aligning with domestic markets it enables investors to utilize real-time price fluctuations and quickly adapt to overall market trends.

Also, it improves ease of access for the two groups of investors which includes domestic and international investors. Additionally, its trading timings correspond with the NSE, thus giving the investor a smooth trading experience if based in India. In addition, the trading period of SGX Nifty, which is based on the MCX Nifty index, makes it convenient for most participants who are in different time zones to trade in Indian equities.

It is here that the assisted investor access creates a path for attaining better portfolio diversification, and investing in the growth prospects of Indian markets.

The index has possibilities for improving the liquidity of the shares. Hence, by synchronizing itself with the Nifty index, investors get a hold of one of the most favorite benchmarks of Indian equities.

This is so because the liquidity in the index is also supported by domestic as well as global investors meaning that the trading activity of the index is characterized by great depth allowing for easy determination of prices and low transaction costs.

How to Trade in Gift Nifty

The trading of Gift Nifty entails the following specific procedures because of its affiliation with GIFT City and the IFSC structure. Here’s a comprehensive guide on how to trade in Gift Nifty: Here’s a comprehensive guide on how to trade in Gift Nifty:

1. Open an Account:

The first action you are supposed to take is to open an account with a brokerage firm that deals in Gift Nifty. Make sure the broker that you are dealing with is a registered and licensed IFSC securities trading broker.

2. Complete KYC Requirements:

Similar to any other financial transaction, the user will be required to go through Know Your Customer (KYC) regulations required by regulatory authorities. This entails submitting documents required to prove the identity and the residence of the applicant.

3. Fund Your Account:

Deposit money into the trading account so that you can have the required margin for trading Gift Nifty derivatives. Usually, the funds are transferred to you electronically through the payment means supported by your broker.

4. Choose a Trading Platform:

Choose a platform among the ones offered by your broker that offers Gift Nifty trading. Ensure that the platform is easy to use as well as stable and has all the functionalities required for your trading operations.

5. Understand the Market:

Acquaint yourself with the characteristics of the correct market including dynamics, trends, and determining factors in the Gift Nifty market. Carry out comprehensive analysis using the available analytical tools and data in the trading account.

6. Develop a Trading Strategy:

Consequently, create a trading plan that suits your preferred level of risk, objectives, and time frame within the context of your market analysis. Some of the factors that could be included involve the entry or exit point in the trade, the amount of capital to be invested in the particular trade, and the strategies that can be used to control the risks involved.

7. Place Orders:

Lastly, after the trading strategy is developed, the orders hoping to buy or sell in the Gift Nifty market can be initiated. Based on your trading preference and outlook you can trade in Gift Nifty derivatives like futures as well as options.

8. Monitor Your Trades:

Ensure that you follow your trades and follow the market progression in intervals. Track all news or events, which has the potential to affect Gift Nifty prices, and act correspondingly in the market.

9. Manage Risk:

Use risk management strategies to avoid the hazards that affect your capital and any related losses. It is recommended to use stop-loss orders, to have different positions at the same time, and to not use too much leverage.

10. Review and Adapt:

Try to conduct your analysis constantly, while performing trading, and evaluate the consequences of the trades made. Try to analyze how profitable and unprofitable trades were made and make necessary alterations to change the loss-making tendencies in the future.

Gift Nifty, thus, functions in the time zone of GIFT-IFSC or Gujarat International Finance Tec-City, which is at Indian Standard Time (IST) plus 4. 5 hours. Gift Nifty operates during the normal Nifty business hours in NSE but the hours are supplemented for international clients.

Gift Nifty Performance

The following table shows that the actual performance of Gift Nifty is almost similar to the Nifty 50 in showing the sentiment of the whole Indian market. Earlier to the period of July 2021, this performance was monitored by SGX. The primary factors of difference thus become Gift Nifty timings and regulations. Specifically, it is vital to note that, at Gift Nifty one trading session stretches from 6:30 am to 3:40 and for Monday to Thursday performing one duty from 4:40 pm to 12:40 am and another duty from 4:35 pm to 2:45 am. These are more than the previous SGX Nifty trading hours which were for 16 hours starting from 6:30 PM to 6:30 AM. These combined fundamentals are synchronized with the new timings that are in the wake of trading hours in Asia, Europe, and America.

Gift Nifty also comprises firms that have their operations based in Gujarat’s Gift City. This special focus is to meet the needs of traders who want to learn about this kind of economic area. When the gift city becomes more and more crucial, it also enables the traders to know how well companies in this region are performing.

Day Range

As with any financial product, the Gift Nifty shows a daily “spread”, which defines the highest and the lowest price at which it is purchased during a particular trading day. The values of this range are useful to analyze trends and fluctuations in the outlook of buyers. A large spread implies high investors’ turnover, and, thus, greater fluctuations in the prices and, on the contrary, a small spread shows relatively stable and not very volatile markets.

Gift Nifty Chart

Drawing the actual and desired picture of the performance of the Gift Nifty index becomes imperative as through the charts of its price trends, investors are in a position to establish trends, patterns, and support/resistance levels of the stock. It is in this context that professional technically oriented analysts can make good use of the Gift Nifty chart to make good technically based decisions.

Gift Nifty Technicals

Indeed, knowing Gift Nifty’s movements requires the assistance of technical analysis. Such patterns and trends are visible and are depicted in the chart which indicates the index’s price. Indicators such as EMAs which stands for Exponential Moving Average and SMAs which stands for Simple Moving Average give information about the momentum and support levels. They are the price averages over a specified period to eliminate sharp price movements within a short period while revealing the most important trends. While SMAs just provide the average price, EMAs pay more attention to recent prices and thus they are more sensitive to the prices. Indeed, it is possible that these technical patterns can provide investors with useful trading signals.

Gift Nifty Smoothing and Resistance

The S&R levels are efficiently used to determine the target price on the Gift Nifty index. It is a term that refers to specific prices on the chart where one expects heavy volumes of buying or selling to occur. The different supports are an implication of a price level where more buyers are likely to be found as compared to sellers while the different resistance levels imply a price level where more selling people are likely to be found than buyers. The identification of these levels through the use of technical analysis will provide the investor with the means to enter a security or to exit a position profitably.

GIFT Nifty Surpasses Record with ₹7.34 Lakh Cr Turnover in May

GIFT Nifty, before called the SGX-NIFTY hit an all-time monthly turnover figure of 7 lac crore rupees in May of 2024. Thus, India’s outstanding stock of automotive imports stood at 34 lakh crore (us $ 88. 10 billion). Indeed this has been the highest monthly turnover recorded so far for the GIFT Nifty beating the previous record recorded in the month of April 2024.

Record-Setting Open Interest

GIFT Nifty on 28th May 2024 also recorded a new high for open interest touching 392577 contracts with a notional value of Rs 1. One billion two hundred and ninety-eight thousand crores of Indian Rupees which is approximately forty-eight lakh crore (US $17. 81 billion). This goes a notch higher than the record achieved within the previous twenty-four hours, showing that the market continues to show interest and faith in the product.

Full-Scale Operations Has Resulted In Exponential Growth

From Its operation fully on July 3, 2023, GIFT Nifty has experienced a steep gradient rise in value. The total volume, in other words, the sum of the daily cubes, has amounted to 18 plus. of 84 million contracts and the cumulative turnover has been touching a whopping ₹ 65. Reaching an estimated figure of Rs. 16 lakh crore (US $782. 08 billion) by the end of the first session on 30 th May 2024.

Conclusion

Thus, the GIFT Nifty can be considered an innovative idea within the area of financial services in India, connecting the international financial market with the domestic one due to the Gujarat International Finance Tec-City. India has provided a robust opportunity for investors locally and internationally through the new substitution of SGX Nifty with GIFT Nifty. This endeavor is set to serve the Indian derivatives market with a strict legal-regulatory mechanism and to promote high trading turnover and product development. Thus, the further development of GIFT Nifty can be expected to play an increasingly important role in the financial and trading model of India.

FAQs – Gift Nifty