Indian (SENSEX) stock futures gained, heading for the first rise in four days, before the release of a monthly inflation report today and as global stocks rallied.
SGX CNX Nifty Index futures for June delivery climbed 0.8 percent to 5,740 at 10:04 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index dropped 1.1 percent to 5,699.10 yesterday, the lowest since April 17. The S&P BSE Sensex fell 1.1 percent, heading for the biggest weekly decline in three months. The Bank of New York Mellon India ADR Index of U.S.-traded shares rose 0.4 percent.
The MSCI Asia Pacific Index rallied as much as 1.5 percent today, after the regional gauge yesterday erased this year’s gains, as U.S. retail and jobless data beat forecasts and investors speculate the Federal Reserve will maintain record low interest rates. India’s benchmark wholesale price inflation probably eased to a 42-month low of 4.87% in May, according to the median estimate of 34 analysts in a Bloomberg survey.
“Given the amount of control foreign investors have over our markets, in the short run it’s all going to be about global newsflow,” Kishor Ostwal, managing director of CNI Research (India) Ltd., said by phone yesterday. “Inflation data needs to be watched closely. We may see some value-buying.”
Foreigners sold a net $319 million of local shares on June 11 and 12, the biggest selloff since the two days through Nov. 25, 2011, data compiled by Bloomberg show. That pared this year’s net purchases to $15 billion, still a record for the period, the data show.
The Sensex has slumped 4.7 percent this month on concern a weakening rupee will stoke consumer prices, limiting the Reserve Bank of India’s scope to extend interest-rate cuts at its policy review on June 17. The currency slumped to an all-time low earlier this week, weighed down by a record current-account gap and the slowest economic growth in a decade.
Twelve of 22 economists in a Bloomberg survey predict the central bank will keep the benchmark repurchase rate unchanged at 7.25 percent. Ten forecast a 25 basis-point cut. The rupee has been Asia’s worst-performing currency this quarter, dropping 6.4 percent and touching a record low of 58.9850 per dollar on June 11.
Finance Minister Palaniappan Chidambaram yesterday signaled the government will implement more economic reforms to revive growth and said steps are being taken to stabilize the currency. The government is seeking to build on the boost to investor sentiment after Fitch Ratings upgraded the nation’s outlook to stable from negative on June 12.
Shares of Tata Motors Ltd. (TTMT) may be active after its Jaguar Land Rover unit reported sales climbed 12 percent from the previous year in May.
Jet Airways (India) Ltd. (JETIN) may be active after the company named former Air New Zealand chief executive officer Gary Kenneth Toomey as its new CEO, succeeding Nikos Kardassis, who resigned less than two months after the carrier agreed to sell a stake to Etihad Airways PJSC.
The Sensex has lost 3.1 percent this year and is trading at 12.9 times projected 12-month earnings, the cheapest since April 24, compared with the MSCI Emerging Markets Index’s 9.8 times. The Indian measure’s 100-day volatility climbed to 14.4 yesterday, the highest level since Sept. 28.
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