India Nifty Futures Fall, Signaling Shares to Snap Two-Day Gain

Indian stock-index futures dropped, signaling benchmark indexes may decline for the first time in three days.

SGX CNX Nifty Index futures for March delivery fell 0.3 percent to 5,828 at 10:16 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index on the National Stock Exchange of India Ltd. rose 0.6 percent to 5,818.60 yesterday, its highest close since Feb. 25. The S&P BSE Sensex index added 0.6 percent to 19,252.61. The Bank of New York Mellon India ADR Index of U.S.-traded shares increased 0.6 percent to a one-week high.

The Sensex has dropped 4.2 percent from a two-year high on Jan. 25 as net incomes at companies from Tata Motors (TTMT) to State Bank of India missed estimates for the December quarter and the economy expanded at the slowest pace in almost four years.

“The case for a structural bull run doesn’t seem to be very strong,” Nikhil Vora, the Mumbai-based managing director at IDFC Securities Ltd., said in an interview with Bloomberg TV India yesterday. “I’m now turning a bit more skeptical on the near-term deliverance from Indian (SENSEX) markets.”

Weak economic data may prompt the Reserve Bank of India to cut borrowing costs at its March 19 policy review, Abhay Laijawala, head of research at Deutsche Equities India Pvt., said in Mumbai on March 4. The RBI pared the repurchase rate by 25 basis points to 7.75 percent on Jan. 29, the first reduction in nine months.

Overseas funds bought a net $55.6 million of Indian stocks on March 5, extending purchases this year to a net $8.48 billion, a record for the period, according to data compiled by Bloomberg.

“India’s dependence on foreign flows is very high and that is a risk for the markets,” Madhusudan Kela, chief investment strategist at Reliance Capital Ltd., said in an interview with Bloomberg TV India yesterday. “I don’t see the market making a new high in a hurry.”

The measure trades at 13.6 times projected 12-month profits, compared with 14.3 times on Jan. 25, compared with the MSCI Emerging Markets Index’s 10.3 times, data compiled by Bloomberg show.

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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