GIFT Nifty turnover plunges 46% MoM to $44.24 billion in May
GIFT Nifty had seen its turnover grow from just under $20 billion in April 2023 to record highs of $82 billion in April 2024 from where it plunged sharply to below $45 billion in May this year.
India’s GIFT Nifty’s turnover has seen the sharpest plunge in May 2024 on month-on-month (MoM) basis in last one year. The index fell 46 per cent month-on-month (MoM) in May 2024 to $44.24 billion from $82 billion in April 2024 due to record selling by FPIs amidst uncertain outcome regarding India’s ongoing Lok Sabha Elections 2024, according to a report by business new portal, Money Control. Other reasons why FPIs have become pessimist on India’s stock market is comparatively richer valuations of domestic equities than that of other nations like China and Hong Kong. The GIFT Nifty index had seen tremendous growth in turnover last one year.
The index had seen its turnover grow from just under $20 billion in April 2023 to record highs of $82 billion in April 2024 from where it plunged sharply to below $45 billion in May this year. Sudden plunge in the turnover signifies FPIs’ pessimism regarding India’s domestic stock market. Moreover, the F&O contract size of Nifty 50 has also halved in last one year. All these factors combined point towards pessimistic approach of FPIs towards India’s domestic stock market. FPIs have been net sellers of India’s equity market so far in 2024. FPIs have withdrawn a net amount of Rs 19,824 crore in equities in 2024 so far.
Experts gauge the GIFT Nifty index to ascertain market sentiment of especially foreign investors regarding India’s domestic stock market. This is because it is mainly FPIs which trade the index. Foreign investors trade the GIFT Nifty derivatives contracts on the NSE International Exchange (IX), headquartered in GIFT City (Gandhinagar). So far retail investors are not allowed to trade the futures contracts of this index.
What is GIFT Nifty?
GIFT Nifty stands for Gujarat International Finances Tech NIFTY. It was earlier Singapore Stock Exhange Nifty (SGX Nifty). It was rebranded in July 2023. It serves as indicator for India’s domestic stock market indices.
What is GIFT CITY?
GIFT CITY stands for Gujarat International Finances Tech-City. It is a hub for India’s financial sector. It was established to centralise India’s international financial services.
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