Gift Nifty

(GIFTNIFTY)

GIFT Nifty is a derivative contract that derives its value from NIFTY 50. NIFTY 50 is India’s benchmark Index that comprises top 50 blue-chip companies based on their market cap weightage. These companies are chosen on the basis of free-float market capitalization. Which is the weightage of companies as per their publicly traded shares.

By trading in GIFT Nifty, International investors get the opportunity to capitalize on India’s economic growth. Further, since GIFT Nifty is facilitated by GIFT CITY, which falls in a SEZ (Special Economic Zone), investors are waived off of any transaction or capital gain tax. The futures contract allows investors to trade 21 hours a day, providing accessibility to investors across the globe. Moreover the trades are settled in US Dollars which is a common currency denominator across the world.

GIFT Nifty provides Indian investors with insights into pre-market sentiment. Since foreign investors trade based on news released after Indian market hours, it offers Indian traders an indication of how international markets are reacting and the likely direction of the market. Many traders use GIFT Nifty as a foundational tool for shaping their intraday trading strategies.

No, GIFT Nifty isn’t always open. Although, it is accessible to foreign investors 21 hours a day. Investors can place trades between 6:30 AM to 3:40 PM and 4:35 PM to 2:45 AM.

Minimum contract size of GIFT Nifty is determined by the lot size, which is 50 as set by the NSEIX. So for example say, if GIFT Nifty is trading at ₹20,000. The minimum contract size would be:

Contract Size = Lot size x Index Price

So, in this case the minimum contract size would be: ₹20,000 X 50 = ₹100,000.

GIFT Nifty is mainly designed for foreign investors and Non-Resident Indians (NRIs). It allows them to trade on India’s Nifty 50 index during global trading hours. Indian traders typically trade Nifty 50 directly on the National Stock Exchange (NSE) during regular Indian market hours.

Yes, you can trade GIFT Nifty from anywhere in the world. It is open to global investors since it is traded on the NSE International Exchange in GIFT City- a special economic zone for international investments. All you need is a trading account with a broker registered on this exchange.

Foreign investors care about GIFT Nifty because it gives them an easy way to invest in India’s stock market. Foreign investors can get exposure to the Indian market by trading in GIFT Nifty  based on international news, economic data, and geopolitical events that occur outside Indian trading hours. It operates in global time zones, so they can trade even when Indian markets are closed. Also, the tax benefits in GIFT City and settlement in US Dollars make it more convenient and cost-effective for international investors.

The Securities and Exchange Board of India (SEBI) oversees the regulatory framework for GIFT Nifty, ensuring fair, transparent, and secure trading practices. The International Financial Services Centres Authority (IFSCA) regulates GIFT City and the NSE International Exchange (NSE IX), where GIFT Nifty is traded, promoting global standards, tax incentives, and a seamless trading environment for international investors. The Reserve Bank of India (RBI) facilitates foreign exchange regulations and the settlement of trades in US Dollars, ensuring global accessibility. Additionally, GIFT City operates under the Special Economic Zone (SEZ) framework, offering tax exemptions like no Securities Transaction Tax (STT) or Goods & Services Tax (GST), making it highly attractive to foreign investors. These regulatory bodies collectively ensure the smooth operation of GIFT Nifty while fostering its growth as a global financial hub.