Indian markets have grown considerably in the past couple of years. The investors today are looking to diversify or get a share of domestic as well as international markets. Two leading Indian indices in the stock market are the GIFT Nifty and Nifty 50. Though they may seem the same, they fulfill two different purposes and cater to different investor needs. Let’s understand GIFT Nifty vs Nifty 50 trades, timings, benefits, and the key difference between them.
What is GIFT Nifty?
GIFT Nifty: This is the Nifty futures contract traded on the NSE International Exchange (NSE IFSC International Financial Service Center) located in the Gujarat International Finance Tec-City, which is the first IFSC from India. Through this, GIFT Nifty offers an alternate platform for trading outside of Indian domestic markets so that Indian equity indices are accessible 24/7 hours. It aims to place India on the global trading map and assist foreign investors gain easier access to the Indian markets. GIFT Nifty was the name given when Nifty futures traded on the Singapore Exchange, formerly known as SGX Nifty. However, in 2023, it was shifted from SGX to NSE IFSC at GIFT City and thus is seen as “GIFT Nifty”. This was a strategy of NSE partnering with SGX to bring offshore Nifty trading into India where substantial liquidity would be encouraged in the local market.
What is Nifty 50?
Nifty 50 is one of the highest indexes in India; operated by the National Stock Exchange of India (NSE), it is a weighted average of the 50 largest companies listed on the NSE, which gives an instant picture of the Indian equity market’s performance. The 50 companies span every sector-from finance to information technology, consumer goods, and energy-and thereby, make Nifty 50 a comprehensive indicator of India’s economic and market health. The Nifty 50 index is the most tracked index both nationally and internationally by investors. The index is used as a benchmark for equity funds, exchange-traded funds (ETFs), and index funds. Investors can get exposure to the performance of the largest and most liquid Indian companies by investing in Nifty 50-based products.
Trading Timings of GIFT Nifty and Nifty 50
The trading hours of GIFT Nifty and Nifty 50 have been structured to accommodate different investor groups, especially because GIFT Nifty offers international access.
GIFT Nifty Trading Hours
GIFT Nifty has extended trading hours and, therefore, allows investors to trade almost 24 hours a day. This accommodates international investors who can engage with Indian markets irrespective of the time zones in which they operate.
GIFT Nifty trading has two sessions:
Day Session: 9:00 AM to 3:30 PM IST
Night Session: 4:35 PM to 2:45 AM IST (next day)
This 24-hour trading helps enhance the liquidity and provides an opportunity to respond to international events that will impact the Indian markets.
Nifty 50 Trading Hours
The Nifty 50 index trades based on the conventional NSE trading schedule, but the trades take place only within the time frame of the Indian market’s daylight hours: Opening: 9:15 AM IST Closing: 3:30 PM IST
Nifty 50 is traded only within the hours of the Indian market, hence it cannot be availed of the flexibility GIFT Nifty provides for accessing Indian indices beyond the traditional trading hours.
Advantages of GIFT Nifty
1. Extended Access: GIFT Nifty offers global investors access to trade the Nifty futures, nearly round the clock as Indian markets would be closed. It suits the institutional investors with exposure and require hedging on account of international developments.
2. Higher Liquidity: International access and extended trading hours attract more participants, thereby leading to a higher liquidity, primarily in India off-market hours.
3. Investment from abroad: GIFT Nifty provides an advantage of staying in GIFT City, which is a financial hub and an international financial center. Since there is no currency conversion problem, one can trade with INR-based contracts.
4. Tax benefits: GIFT City benefits the investor with numerous tax advantages such as capital gains tax does not apply for a specific type of trading, which makes this investment option cost-effective.
Advantages of Nifty 50
1. Segment Representation: Nifty 50 gives the investor representation of the top 50 across the different sectors of India’s economy and its corporate sector.
2. Highly Tracked Index: Nifty 50 is one of the most tracked indices in India that offer a benchmark for the investors as well as the fund managers, too.
3. Direct Investment Options: Investors can purchase direct participation from the Nifty 50 list on NSE or can invest in index funds and exchange traded funds tracking the Nifty 50 so that one can find an investment plan of one’s choice.
4. Market Action Feedback in Real-time: Nifty 50 allows real-time action at Indian markets during India’s business hours that capture India’s mood through blue-chip stocks performance
What is the main difference between GIFT Nifty and Nifty 50?
Even though GIFT Nifty and Nifty 50 are based on the same Nifty index, they cater to different purposes and kinds of requirements. There are some main differences between them discussed below:
Criteria | GIFT Nifty | Nifty 50 |
Location | Traded at the NSE IFSC, GIFT City, Gujarat | Traded at the NSE India |
Access to Market | Available for international investors (almost 24-hour access) | Majorly for domestic players |
Trading Hours | Almost 24-hour trading (Day and Night sessions) | Limited to NSE hours (9:15 AM to 3:30 PM IST) |
Tax Benefits | Provides tax benefits in GIFT City | Subject to standard Indian tax laws |
Liquidity | Greater on account of international access | High, but only during regular NSE hours |
Primary Purpose | Futures trading and hedging for global investors | Equity market tracking by domestic investors |
Price Sensitivity | More sensitive to global events in the market. | Captures Indian sentiments in the market only during NSE hours. |
How to Invest in GIFT NIFTY & NIFTY 50?
Investing in GIFT Nifty
Investment in GIFT Nifty would need an individual to have a broker providing the facility to invest into NSE IFSC in GIFT City. This can be presented by specific brokers which provide Nifty futures in international markets. An investor can use it as a hedge also, and a means of investing in the Indian market outside their country trading hours.
Investment in Nifty 50
There are various ways through which an individual can invest in Nifty 50.
1. Direct Stocks: Buy shares of the direct companies forming Nifty 50.
2. Index Funds: Invest in index mutual funds or ETFs tracking Nifty 50, thereby giving you an exposure to the entire index.
3. Nifty Futures: Trade Nifty 50 futures on regular hours on the NSE to play directional views on the market.
Conclusion
GIFT Nifty and Nifty 50 present two different yet complementary routes for investors to take in the Indian equity markets. The GIFT Nifty would offer almost daily exposure to Nifty futures; hence it is designed for international investors who would like to trade on the Indian market even when the NSE does not exist. On the other hand, the Nifty 50 serves as a good snapshot of India’s best companies during the Indian domestic trading hours and can turn out to be a major tool used by the investors of India’s performance.The differences and the advantages as well that are involved with both platforms are to such an extent that some offer exposure to direct equity and others permit futures trading and hedging globally. Therefore, the aforementioned differences will be able to differentiate between GIFT Nifty and Nifty 50 keeping all in line with investment goals, time zone, and access requirements.