Indian stock-index futures dropped after data from the U.S. and Europe fanned growth concerns, and as investors await government measures to spur the economy.
SGX S&P CNX Nifty Index futures for July delivery fell 0.1 percent to 5,262 at 10:22 a.m. in Singapore. The underlying S&P CNX Nifty (NIFTY) Index on the National Stock Exchange of India Ltd. increased 0.5 percent to 5,242.70 yesterday. The BSE India Sensitive Index (SENSEX), or Sensex, rose 0.6 percent to 17,278.85.
Spain’s five-year borrowing costs surged at an auction yesterday as the government pushed through spending cuts in the face of public protests. U.S. initial jobless claims were higher than estimated and measures of manufacturing activity and sales of existing homes missed estimates, reports yesterday showed. Indian lawmakers voted yesterday and are expected to elect former finance minister Pranab Mukherjee as the country’s next president as the government seeks to revive an economic reform agenda stymied by opposition from its own allies.
“The focus is entirely on New Delhi right now,” Pratik Gupta, head of equities at Deutsche Equities India Pvt., told Bloomberg UTV yesterday. “A lot of policy steps need to be taken. Some of these are politically sensitive, which can be taken once the presidential election is out of the way.”
Prime Minister Manmohan Singh’s government last year suspended a plan to allow Wal-Mart Stores Inc. and other overseas companies to open supermarkets, while an anti- corruption bill and proposals to allow foreign direct investment in aviation and pensions are also stalled.
Mukherjee’s exit from the government may trigger a cabinet reshuffle as the prime minister, who took control of the finance ministry portfolio on Mukherjee’s departure, tries to revitalize his development agenda. Singh has pledged to revive Indian growth after expansion slowed to 5.3 percent in the first quarter from a year earlier, the slowest pace in almost a decade.
Futures also fell amid concerns deficient monsoon rains will curb agricultural output and jeopardize efforts to cool inflation. The monsoon, which accounts for more than 70 percent of annual rainfall, was 22 percent below a 50-year average since June 1, the nation’s weather bureau said yesterday.
Reliance Industries Ltd. (RIL), operator of the world’s biggest oil-refining complex, may report today a 23 percent drop in net income to 43.8 billion rupees ($794 million) in the three months ended June 30, from 56.6 billion a year earlier, according to the median estimate of 25 analysts surveyed by Bloomberg.
Hindustan Zinc Ltd. (HZ) may post profit of 13.9 billion rupees, compared with 14.9 billion rupees a year earlier, according to the median estimate of 27 analysts.
Shares of Steel Authority of India Ltd. may be active after Rural Development Minister Jairam Ramesh said yesterday that India’s cabinet approved the sale of a 10.82 percent stake in the nation’s second-biggest producer of the metal.
The Sensex has gained 12 percent this year and trades at 13.5 times estimated earnings, compared with the MSCI Emerging Markets Index’s 10.2 times.
Four out of seven, or 57 percent, of companies on the Sensex that have reported June-quarter results have missed analyst estimates, according to data compiled by Bloomberg.
Overseas investors bought domestic shares for a 13th day yesterday, the longest run of net purchases since February, data from the regulator show. Foreign funds have invested a net $10 billion in Indian equities this year, the highest in Asia and a record for the period.
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