SGX Nifty Explained – How SGX Nifty affects Indian Share Market?

By Trader Pit

July 4, 2021


Securities and derivatives are complex financial instruments. They can be traded on any exchange in the world, and their values are often quoted in terms of a reference price called a ‘settlement price’ (colloquially known as a ‘reference price’, ‘reference rate’, or ‘reference index’). The SGX Nifty is a basket of stocks and is one of the most widely traded securities in the country. The SGX Nifty covers a wide variety of Indian Index constituents, and is often quoted in the media as a benchmark for the Indian share market.

The Nifty 50 index is one of the most followed indices in the world. It tracks the performance of the largest 50 companies listed on the National Stock Exchange (NSE) in India. The leading index is the Nifty 50, which tracks the performance of the top 50 companies on the NSE. The weight given to each company in the index is based on the market capitalisation of the company.

SGX Nifty is the acronym for Singapore Exchange, and is the market place where the majority of the trades in India take place. The Nifty is the biggest market in the country, and is closely followed by the Sensex. Every stock traded on the Nifty has its own unique stock symbol, which is displayed in bold letters. If you wanted to trade stocks using an electronic platform, you would use these stock symbols.

Understand the significance of SXG Nifty and its impact on Indian stock market : If you are an active trader in the Indian stock market, you have probably heard of the term SGX Nifty. Open any business news channel and all you see before the Indian stock market opens is an hour-long discussion on the SGX Nifty and its impact on that day’s opening of the Nifty.

The importance of understanding this terminology can be gauged from the fact that it is one of the most popular hashtags that are followed or searched on various social media platforms like Twitter if one wants to better understand the Indian stock market. In this article, we will see what SGX nifty is and how it affects the Indian stock market.

What is the SGX Nifty?

The word SGX is an acronym for the Singapore Stock Exchange. The Nifty is also the benchmark index for the Indian National Stock Exchange (NSE) and consists of the 50 largest companies listed on the NSE. All in all, if we put these two together, we can say that SGX Nifty is an Indian Nifty traded on the Singapore Stock Exchange. It is an actively traded futures contract on the Singapore Exchange.

(Source: Sgx.com)

Who is allowed to trade on the SGX Nifty?

For investors who are interested in trading Nifty but do not have access to the Indian markets, trading SGX Nifty is a very good alternative. Even large hedge funds with a significant stake in the Indian market consider SGX Nifty as a good alternative to hedge their positions.

Moreover, Indian nationals are not allowed to trade in SGX Nifty contracts. Thus, Indian nationals are not allowed to trade in derivatives in other countries.

Difference between Nifty and SGX Nifty?

1. The SGX nifty is a nifty futures contract traded on the Singapore Exchange. In India, the nifty contract is being negotiated at the NSE.

2. The SGX Nifty contract size is different from the Nifty. In India, we have 75 shares in each share contract of Nifty, while Nifty has no share contract at SGX. SGX Nifty is quoted in US dollars. If the Nifty trades at 9500, the SGX Nifty contract size will be 9500*(2 USD), or 19000 USD.The SGX Nifty is a market index that tracks the performance of the top 50 companies of the National Stock Exchange of India (NSE) and the Bombay Stock Exchange.(BSE). These companies include large companies with international operations and smaller companies who have aspirations of expansion.. Read more about sgx nifty timing as per india and let us know what you think.

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About the author

Trader Pit

A yogi who like Finance and Technology. I have been in Indian Stock market for over 12 years now as financial analyst, portfolio manager, trader. Now, I focus on Yoga, Financial Education & Long term investing. 

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