What are the things that affect the price of Nifty shares and SGX Nifty?

The performance of 50 big companies on the National Stock Exchange (NSE) of India is shown by the Nifty 50 index, which is also known as the “Nifty share price.” Its movements are affected by both local and international factors, which show how people feel about the economy as a whole. SGX Nifty is an early warning sign that is influenced by trends around the world. Knowing about these things helps buyers plan for volatility and make smart choices. Kotak Securities tracks both in real time through the Neo app, which helps with coming up with a plan.

Factors in the domestic economy

Local economic factors are very important for the Nifty share price. Rates of inflation have a big effect on the index. Moderate inflation helps stock prices rise by getting people to spend, but high rates hurt purchasing power and company profits, which causes prices to fall. Trade-based industries are affected by exchange rates, especially the INR-USD pair. An undervalued rupee helps IT and pharmaceutical companies make more money, which drives the Nifty up, while a strong rupee can hurt them. Prices of commodities, like crude oil, affect the cost of energy and making things. If the price of oil goes up, it can put pressure on the index by making prices go up and profits go down. The Industrial Production Index (IIP) tracks the output of manufactured goods. A rise in the IIP shows that the economy is growing, which is good for the Nifty. Earnings reports from the companies that make up the index have a direct effect on it. When quarterly results are good, the index goes up, and when they are bad, it goes down.

Effects on the Global Market

Both are strongly affected by global forces. Changes in US indices like Dow Jones and Nasdaq can affect the Nifty share price through waves of foreign institutional investors (FIIs). When global markets are feeling good, FIIs come in, which makes the index go up. When there are trade wars, geopolitical tensions, or economic slowdowns in big economies, people are less willing to take risks, which leads to sell-offs. The 16-hour trading window for SGX Nifty makes global events more important. What happens in the US or Asian markets after hours has a direct effect on its price and often sets the tone for Nifty’s start. Changes in currencies and the prices of commodities around the world make their moves even more similar.

Changes to rules and regulations

The Nifty share price is affected by government rules and policies. Budget announcements, tax changes, or stimulus packages can cause price increases or decreases. Changes in Indian or Singaporean trading rules, like the move to GIFT City in 2023, affect the amount of money that can be traded on SGX Nifty (now GIFT Nifty). Because Hong Kong is a financial hub, bigger global policies like trade deals between the US and China affect both.

The SGX Nifty often gives us a sneak peek at the Nifty share price. Investors can use these to plan ahead by keeping an eye on them.