What is GIFT Nifty and why was it in the news today?
GIFT Nifty futures traded flat today, reflecting cautious investor sentiment ahead of the monthly expiry. As of early morning trade, GIFT Nifty was quoting near 22,510, slightly up from yesterday’s close. This movement closely mirrored the subdued global cues and pre-expiry positioning by traders. With GIFT Nifty futures expiring on the last Thursday of the month, today marks a critical settlement day. This also signals how closely aligned GIFT Nifty is with broader Indian market expectations.
Let’s rewind: What is GIFT Nifty and where did it come from?
GIFT Nifty is the revamped avatar of SGX Nifty, the derivative contract that was traded on the Singapore Exchange (SGX) for years and tracked the performance of India’s Nifty 50 index. In July 2023, these contracts were officially moved from SGX to the NSE International Exchange (NSE IX) in Gujarat’s GIFT City—a move to bring offshore trading back to India. Hence the name, GIFTNifty.
This strategic relocation was part of the IFSC (International Financial Services Centre) initiative by the Indian government to bolster India’s global financial hub.
How is GIFT Nifty calculated?
GIFT Nifty is calculated based on the performance of India’s Nifty 50 index, factoring in real-time price discovery through futures contracts traded on NSE IX. These futures mirror the domestic Nifty but trade for longer hours, accommodating global investor activity.
For example, if Nifty 50 is at 22,500 on the NSE and global cues are positive, GIFTNifty might trade at 22,520 due to anticipated gains. The index reflects a rolling position of Nifty futures rather than a standalone index.
What stocks are part of the GIFT Nifty index?
GIFTNifty tracks the Nifty 50 index. This includes India’s 50 most liquid and fundamentally strong companies such as:
- Reliance Industries
- HDFC Bank
- Infosys
- TCS
- ICICI Bank
So, technically, GIFT Nifty doesn’t have a different stock basket—it reflects the same universe as the Nifty 50.
Who regulates GIFT Nifty and where is it traded?
GIFT Nifty is regulated by the International Financial Services Centres Authority (IFSCA) and is traded on the NSE International Exchange (NSE IX) located in GIFT City, Gandhinagar, Gujarat. This is India’s first operational IFSC and is designed to compete with financial hubs like Dubai and Singapore.
What are the trading hours of GIFT Nifty?
One of the most distinctive features of GIFTNifty is its extended trading hours:
- Session 1: 6:30 AM to 3:40 PM IST
- Session 2: 4:35 PM to 2:45 AM IST (next day)
This extended window makes it highly attractive for foreign investors and helps track global market sentiments better than domestic Nifty futures.
How does GIFT Nifty differ from NSE Nifty?
| Feature | GIFT Nifty | NSE Nifty |
|---|---|---|
| Location | NSE IX, GIFT City | NSE, Mumbai |
| Regulator | IFSCA | SEBI |
| Trading Hours | 6:30 AM – 2:45 AM (two sessions) | 9:15 AM – 3:30 PM |
| Currency | USD | INR |
| Investor Base | Global (especially FIIs) | Domestic |
What are GIFT Nifty futures and options?
These are derivative contracts based on the Nifty 50 index, traded in USD on the NSE IX platform. Investors can take positions in the GIFTNifty futures or hedge using options, much like they would in the domestic market.
Each GIFTNifty futures contract represents 2 lots of 25 Nifty units (totaling 50), and is settled in USD. Options trading is still catching up in terms of volumes but is expected to rise.
What is the GIFT Nifty expiry schedule?
GIFTNifty derivative contracts follow a monthly and quarterly expiry, occurring on the last Thursday of every month. In case of a holiday, the expiry shifts to the previous working day.
Settlement is done in USD, and open positions are automatically squared off post expiry.
What happened to SGX Nifty?
SGX Nifty has been phased out as part of the NSE-SGX Connect. All open interest and fresh trades were seamlessly migrated to NSE IX’s GIFTNifty contracts.
Why was this shift important?
The migration allowed India to:
- Bring derivative volumes back home
- Gain better oversight of foreign trades
- Establish GIFT City as a global trading hub
How can an Indian investor access GIFT Nifty?
While GIFT Nifty is aimed at global investors, Indian residents cannot directly trade on NSE IX unless they qualify as eligible investors under the Liberalised Remittance Scheme (LRS). Here’s how it works:
- You must route your investment via an international trading account or through a broker registered with NSE IFSC.
- Indian brokers like Zerodha, ICICI Securities, and Groww are working on offering IFSC platforms.
- You’ll need FEMA-compliant documents and to declare USD investments under LRS (max $250,000 per year).
This creates an opportunity for Indian HNIs and institutions to diversify and track global sentiment better.
What’s in it for investors?
- Better Global Access: With longer hours and dollar-denominated trading, GIFT Nifty gives Indian and global investors seamless access.
- Hedge Against Overnight Events: Since trading continues past Indian hours, traders can hedge during key U.S. and European market developments.
- FII Attraction: GIFT City’s tax benefits and lower compliance make it attractive for global funds.
Are there other indices in GIFT City?
Yes, apart from GIFT Nifty, NSE IX also offers:
- Nifty Bank futures
- Nifty Financial Services futures
- Single stock futures (Infosys, Reliance, etc.)
- USD-INR contracts
How is GIFT Nifty performing today?
As of today, GIFTNifty was trading flat at 22,510, mirroring Nifty’s subdued mood before expiry. This shows the high correlation between GIFTNifty and NSE Nifty, making it a reliable sentiment indicator.
Case Study: How GIFT Nifty helped predict market moves
On April 15, 2024, GIFT Nifty surged by 80 points after positive U.S. inflation data. The next day, Nifty opened gap-up by 90 points, almost mirroring the GIFTNifty trend. This shows how it acts as a leading indicator for Indian markets.
Final Thoughts
GIFT Nifty isn’t just a technical evolution—it’s a leap forward in India’s financial globalization. For traders, analysts, and investors alike, understanding GIFTNifty gives early insight into the pulse of the Indian markets.
With robust trading infrastructure, transparent pricing, and increasing volumes, it’s only a matter of time before GIFTNifty becomes the go-to benchmark for Indian market sentiment worldwide.
Related Links:
- NSE IX Official Website
- Live GIFTNifty Futures Chart – Investing.com
- SEBI Circular on IFSC Access
- India International Exchange (INX)
- IFSCA Regulations
- Nifty 50 Companies List – NSE India
- Zerodha IFSC Blog on GIFTNifty
- Groww on International Investing
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