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What is SGX Nifty
SGX Nifty Futures contract represents a legally binding agreement between two parties to pay or receive the difference between the predicted underlying NSE India Index price set when entering into the contract and the actual NSE India Index price when the contract expires.
Because the NSE India Index and the SGX Nifty Futures contract are so closely related both in price movement and value change, Dow Future are used to gauge the direction of the market. DJIA futures contracts begin trading on the Chicago Board of Trade at 6:30am IST, i.e. 2 hour & 30 mins before the NSE India Index opens for trading.
SGX Nifty Futures : Importance of SGX Nifty Future Contracts
Every morning before Indian stock exchanges begin trading, TV programs and websites providing financial information will give the quotes for the SGX Nifty Futures contract. The quoted price movements of the SGX Nifty Futures contracts in early trading is used by some traders as a gauge for how the overall exchanges will perform at market open and over the trading day.
If SGX Nifty Futures is trading higher before the market opens, it generally means that the actual NSE index will trade up in the early part of the day.
This is because the SGX Nifty Futures are closely tied to the actual NSE India Index. SGX Nifty Futures contracts mirror the underlying index and act as a precursor of the actual NSE India Exchange index’s direction.