Bloomberg News

India’s Nifty Futures Rise, Signaling Equities to Extend Rally

January 06, 2013

Indian (SENSEX) stock-index futures rose, indicating equities will extend the biggest weekly rally in five weeks.

SGX S&P CNX Nifty Index futures for January delivery gained 0.1 percent to 6,051, at 10:26 a.m. in Singapore. The underlying S&P CNX Nifty (NIFTY) Index rose 0.1 percent to 6,016.15 on Jan. 4. The BSE India Sensitive Index, or Sensex, added 0.1 percent to 19,784.08. Both gauges closed at two-year highs. The Bank of New York Mellon India ADR Index of U.S.-traded shares sank 0.6 percent from a three-month high.

The Sensex climbed 1.7 percent last week, the most since the period ended Dec. 2, as a private survey showed Indian manufacturing expanded at the fastest pace in six months in December and after U.S. lawmakers passed a bill averting tax increases and spending cuts. The gauge’s valuation has risen to 15.6 times estimated profit, the highest level since March.

“Economic reforms in the country and positive global cues have all aided in lifting market sentiment,” Nidhi Sarswat, a senior research analyst at Bonanza Portfolio Ltd., wrote in an e-mailed note on Jan. 4. “The Nifty has broken the resistance level of 5,965 and also closed above the 6,000 mark, which is a positive indicator.”

The Sensex rallied 26 percent in 2012, its biggest annual gain since 2009, as government measures to bolster an economy growing at the slowest pace in three years accelerated foreign inflows. Prime Minister Manmohan Singh began announcing in September measures including raising diesel prices and allowing more foreign investment in the retail and airline industries.

Bank Upgrades

Axis Bank Ltd. (AXSB) and Punjab National Bank may move after BNP Paribas SA upgraded the lenders to buy from hold. The brokerage raised its outlook on Indian banks to improving from neutral, citing government policy reforms and the possibility of lower interest rates, according to a report dated Jan. 4.

The policies propelled foreign inflows into local shares to a net $24.5 billion last year, the highest among 10 Asian markets tracked by Bloomberg, excluding China. Foreign funds bought a net $265 million worth of Indian shares on Jan. 3, taking total inflows for the first three days of 2013 to $670 million, data from the market regulator show.

The slowdown in economic growth may have bottomed out, C. Rangarajan, chairman of Prime Minister’s Economic Advisory Council, said in New Delhi on Jan. 5. India’s current account deficit remains high and the country needs to cut inflation to acceptable levels, he said.

Mahindra & Mahindra Ltd. (MM), India’s biggest sport-utility vehicle maker, may move after it unveiled two motorcycle models as the company prepares to reenter the market. Indian Oil Corp. (IOCL), the nation’s largest refiner, may be active after saying over the weekend that two workers died in a fire at a gasoline tank in Gujarat state.

To contact the reporter on this story: Shikhar Balwani in Mumbai at sbalwani@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net


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