The Gujarat International Finance Tec-City (GIFT City) is set to witness a significant development in the financial markets as the trading of GIFT Nifty is scheduled to commence on July 3. This decision was announced by Ashish Chauhan, the Managing Director and CEO of the National Stock Exchange (NSE).
Introduction to GIFT Nifty
GIFT Nifty is a unique and innovative product introduced by the NSE, tailored specifically for the GIFT City. GIFT City is an International Financial Services Centre (IFSC) located in Gandhinagar, Gujarat, India. It aims to establish itself as a global financial hub, attracting domestic as well as international investors.
According to CNBC Awaaz, Ashish Chauhan, the CEO and MD of the National Stock Exchange (NSE), has announced that GIFT Nifty Futures will be introduced on major exchanges worldwide. It is expected to surpass a trading volume of one trillion in the upcoming days.
SGX Nifty will have a new form called GIFT Nifty 3rd Generation from July 3rd, available for trading 21 hours a day. SGX Nifty represents the Nifty indices of the National Stock Exchange (NSE) and is traded on the Singapore Stock Exchange (SGX) as a derivative product. Starting from July 3rd, GIFT Nifty will be traded from the GIFT City in Gandhinagar. It will include all open interest positions in GIFT IFSC.
According to CNBC Awaaz, Ashish Chauhan, the CEO and MD of the National Stock Exchange (NSE), has stated that GIFT Nifty will feature on every major exchange worldwide, similar to other prominent exchanges. He further mentioned that the trading volume of GIFT Nifty is expected to surpass one trillion in the upcoming days.
Ashish Chauhan mentioned that there are 60 brokers present for GIFT Nifty, while 50 brokers are in the pipeline. He also stated that foreign companies will have the facility of listing on GIFT Nifty. GIFT Nifty will operate for more than 21 hours, starting from 6:30 AM to 3:30 PM on the next day. The MD and CEO of NSE mentioned that foreign companies will be listed here in a short period of time. Trading will be conducted in Indian Rupees, which will save costs on dollar conversion.
SGX Nifty is significant for the Indian stock market because it provides an avenue for trading based on the Indian Nifty indices. Currently, trading in SGX Nifty takes place according to the Indian time zone, starting from 6:30 AM to 10:30 AM and continuing for 16 hours. Traders often look to SGX Nifty as an early indicator of the Indian market’s potential opening direction. Many foreign investors, who wish to gain exposure to the Indian market or conduct research, occasionally trade using SGX Nifty contracts, although they may not always seek active trading.
If trading hours are extended, it can lead to an increase in the number of global investors, especially those from the United States, who prefer to trade Nifty futures contracts that are linked to the value of the dollar. With the establishment of GIFT City, it is likely that trading hours may be extended to accommodate these investors’ preferences.
The Significance of GIFT Nifty
GIFT Nifty holds great significance for the financial markets in India. It serves as a platform for investors to trade in Nifty, which is the flagship index of the NSE. The introduction of GIFT Nifty enables investors to access the Indian markets directly from GIFT City, thereby promoting the development of the financial ecosystem within the city.
Benefits of Trading GIFT Nifty
- Increased Accessibility: GIFT Nifty provides an opportunity for both domestic and international investors to participate in the Indian markets without the need for a physical presence in the country. This enhances accessibility and opens up new avenues for investors.
- Tax Benefits: Investors trading in GIFT Nifty can avail themselves of tax benefits provided under the IFSC regime. These benefits include exemptions on capital gains tax and securities transaction tax, among others. Such favorable tax conditions make GIFT Nifty an attractive option for investors.
- Enhanced Liquidity: With the introduction of GIFT Nifty, liquidity in the Nifty index is expected to increase. The participation of additional investors from GIFT City would contribute to higher trading volumes and enhanced market depth.
- Diversification Opportunities: GIFT Nifty offers investors an opportunity to diversify their portfolios by including Indian equities. This enables them to spread their investment risk across different markets and gain exposure to the potential growth of the Indian economy.
Steps to Start Trading GIFT Nifty
To begin trading GIFT Nifty, investors need to follow a few simple steps:
- Opening an Account: Investors must first open an account with a registered broker who provides access to GIFT Nifty trading. This involves completing the necessary documentation and fulfilling the account opening requirements.
- Fund the Account: Once the account is opened, investors need to fund their trading account with the desired amount of capital. This would enable them to execute trades in GIFT Nifty.
- Execute Trades: With a funded account, investors can now start trading GIFT Nifty. They can place buy or sell orders through their broker’s trading platform, taking advantage of the price movements in the Nifty index.
The introduction of trading in GIFT Nifty from July 3 marks a significant milestone in the development of GIFT City as a financial hub. This move brings forth opportunities for investors to participate in the Indian markets with ease and reap the benefits of trading in the Nifty index. With increased accessibility, tax benefits, enhanced liquidity, and diversification opportunities, GIFT Nifty has the potential to attract a wide range of investors to GIFT City. As the financial ecosystem in GIFT City evolves, it is poised to emerge as a prominent player in the global financial landscape