What is SGX ?
SGX means Singapore Exchange. Singapore exchange is the leading exchange of Asia allowing investors to take positions in different products based on the futures which are traded on the exchange. Apart from India the exchange also allows one to take positions in FTSE, China A50 index, MSCI Asia, MSCI Hongkong, MSCI Singapore, MSCI Taiwan ,Nikkei 225, Strait Times etc.
Thus, FIIs are able to take positions in all major indices while being in Singapore.
In Singapore Exchange, Indian stocks cannot be traded but it allows future products like SGX Nifty Futures.
What is SGX Nifty?
SGX Nifty is a derivative product of NIFTY 50 which is also known as Singapore Nifty, involves taking position in the Singapore Exchange on Futures contracts. The Futures contracts settlement is based on the NIFTY settlement price in the Indian stock exchange NSE. This gives international investors the flexibility of betting on Indian markets without having to setup or register the entity with the Indian authorities.
Since the SGX allows for 24 hour trading via after market trades, investors can hedge their bets at any time. Plus, it is also considered a good indicator to where Indian market will open the next day, due to this a lot of traders follow this to check how SGX Nifty is doing.
How does SGX Nifty helps trader for Opening price action next day?
Time difference between India and Singapore is 2 hours and 30minutes.
Indian stock market opens at 9:15 AM and close at 3:30 PM while SGX NIFTY trades for 16 hours a day in Singapore Stock exchange in two different periods.
- Timings- Mon-Fri – 9:00 am – 6:15 pm (6:30 am – 3:45 pm IST)
- 1 hour trading break.
- Timings- Mon-Fri – 7:15 pm – 1:00 am (4:45 pm – 10:30 pm IST)
Because of the long trading hours, the impact of global events is more advanced on it. That is why it is considered as a good indicator to know where India market will open next day.
This also makes it easy for Indian advisory and financial institutions to give trading recommendations on Nifty before opening and Pre-market opening report.
SGX Nifty is more volatile compared to Indian Nifty futures due to it’s long trading hours.
For Example-if SGX Nifty Future price is 50 point up than Indian Nifty future previous close price at 7~8 am (IST), Nifty Future in Indian market will open in green and gap up 50 point approximately. In case of negative SGX Nifty, Indian market will open in red.
Where can you see SGX Nifty prices ?
Tracking SGX Nifty always helps in trading and get to know the Initial direction of the Indian Stock exchange.