India’s Nifty Equity Futures Fall, Signaling Declines for Stocks

Indian (SENSEX) stock-index futures dropped, signaling declines for the benchmark indexes.

SGX CNX Nifty Index futures for March delivery slid 0.4 percent to 5,702.5 at 10:13 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index on the National Stock Exchange of India Ltd. gained 0.5 percent to 5,719.70 on March 1. The S&P BSE Sensex index added 0.3 percent to 18,918.52. The gauge dropped 2.1 percent last week, the most since the five days ended May 13. The Bank of New York Mellon India ADR Index of U.S.-traded shares sank 0.1 percent.

The Sensex plunged 5.2 percent in February, the biggest monthly drop since May. India’s economy grew 4.5 percent in the three months ended Dec. 31 from a year ago, the weakest pace in almost four years, government data showed Feb. 28. Overseas investors sold $237 million of stocks on Feb. 28, the biggest sale in about a year, data compiled by Bloomberg show.

“In the short term, we are vulnerable to disruption in capital flows,” Prashant Jain, chief investment officer at HDFC Asset Management Co., the nation’s biggest money manager with $18.6 billion in assets, said in an interview with Bloomberg TV India on March 1. “We are in a situation where we are not derisked. We hope that government does something to reduce our vulnerability to external capital flows.”

Foreigners have still bought $8.24 billion of shares since Jan. 1, extending last year’s $24.5 billion of inflows that were the most among 10 Asian markets tracked by Bloomberg.

Sensex Valuations

The Sensex has fallen 5.9 percent from a two-year high reached on Jan. 25 as profits from State Bank of India to Tata Motors Ltd. (TTMT) missed estimates and as local mutual funds saw net outflows for the eighth month in January, data from the industry trade body show.

The Sensex trades at 13.4 times projected 12-month profits, compared with 10.2 times for the MSCI Emerging Markets Index, data compiled by Bloomberg show.

Profits at 43 percent of the Sensex companies trailed estimates in the three months through Dec. 31, compared with 40 percent in the previous two quarters, data compiled by Bloomberg show.

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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