India’s Nifty Futures Advance Before Government Inflation Data

Indian (SENSEX) stock-index futures gained before government inflation data for December.

SGX S&P CNX Nifty Index futures for January delivery rose 0.3 percent to 5,990, at 10:48 a.m. in Singapore. The underlying S&P CNX Nifty (NIFTY) Index lost 0.3 percent to 5,951.30 on Jan. 11. The BSE India Sensitive Index, or Sensex, was little changed at 19,663.64. The Bank of New York Mellon India ADR Index of U.S.- traded shares surged 6.7 percent.

Data today may show wholesale price inflation accelerated to 7.37 percent in December from a year ago, according to the median estimate of 34 economists in a Bloomberg survey. Tata Consultancy Services Ltd., India’s largest software exporter, is due to announce its third-quarter profit today.

“Inflation will be the key event in the week, along with the slew of earnings,” Amar Ambani, head of research at brokerage IIFL Ltd., wrote in an e-mail on Jan. 11. “Watch out for the core inflation reading, a measure closely followed by the Reserve Bank of India.”

RBI Governor Duvvuri Subbarao signaled higher odds on Dec. 18 of a cut in interest rates next year as he held borrowing costs unchanged for a fifth policy meeting. Goldman Sachs Group Inc. (GS) said the next day it sees a “high likelihood” of a 50- basis point reduction in a policy review due on Jan. 29, Tushar Poddar, the bank’s chief India economist, wrote in a note to clients.

Infosys Ltd., the first Sensex company to announce earnings for the December quarter, surged by a record on Jan. 11 after it raised its sales forecast and reported profit that beat estimates. The stock was the worst performer in the Sensex last year.

Foreign Investment

Net incomes of the 30 Sensex companies may grow 11 percent from a year ago in the December quarter, after rising 7 percent in the previous three months, Kotak Institutional Equities said in a Jan. 3 report. Profit for 40 percent of the Sensex firms missed analysts’ estimates for the September quarter, the same as for the quarter ended June, data compiled by Bloomberg show.

The Indian stock gauge had its biggest annual rally last year since 2009 as Prime Minister Manmohan Singh opened the economy to more foreign investment to boost an economy growing at the slowest pace in three years and to avert a credit-rating downgrade. The steps prompted offshore funds to invest $24.5 billion into domestic shares last year, the highest among 10 Asian markets tracked by Bloomberg.

Foreigners bought a net $1.45 billion of stock this year, more than three times the level at the same time in 2012, data from the regulator show. The Sensex has risen 1.2 percent this month and trades at 15.6 times estimated profit, approaching the highest reading since March.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net

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

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