Bloomberg News

India’s Nifty Futures Signal Stocks to Rise After Friday Slump

April 28, 2013

Indian (SENSEX) stock-index futures gained, signaling benchmark gauges may advance after slumping the most in two weeks on April 26.

SGX CNX Nifty Index futures for May delivery rose 0.3 percent to 5,902 at 10:08 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index dropped 0.8 percent to 5,871.45 on April 26. The S&P BSE Sensex index slid 0.6 percent to 19,286.72. Both gauges slumped by the most since April 12. The Bank of New York Mellon India ADR Index of U.S.-traded shares fell 1.2 percent.

The Sensex has rebounded 5.8 percent from a seven-month low on April 9 as slowing wholesale-price inflation and a drop in gold and oil prices stoked speculation the Reserve Bank of India will lower interest rates this week. The central bank may pare its key rate by 25 basis points at its May 3 review, according to the median of a Bloomberg economist survey.

“The rally has caught a lot of people by surprise and the RBI policy on May 3 has been the real trigger,” Sajiv Dhawan, managing director at brokerage JV Capital Services, said in an interview with Bloomberg TV India on April 26. “If the central bank doesn’t cut rates, we could see the markets react quite sharply.”

The Sensex is valued at 12.9 times projected 12-month profits, compared with a multiple of 10.3 for the MSCI Emerging Markets Index. The Indian gauge is still down 0.7 percent this year, amid concerns about slowing economic growth, a record current-account deficit and the highest inflation rate among the largest emerging nations.

Corporate Earnings

Hero MotoCorp Ltd. (HMCL) may move today after reporting fourth- quarter net income of 5.74 billion rupees ($106 million), more than the 5.02-billion rupee median estimate of analysts in a Bloomberg survey. Consumer-goods maker Hindustan Unilever Ltd. (HUVR) and Sterlite Industries (India) Ltd. (STLT), India’s biggest copper producer, are due to report earnings today.

Foreign funds bought a net $285.4 million of local shares on April 25, taking their net investment in stocks this year to $10.97 billion, data compiled by Bloomberg show. Inflows last year were $24.5 billion, the most among 10 Asian markets tracked by Bloomberg.

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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