India’s Nifty Stock Futures Little Changed After Deficit Report

Indian stock-index futures were little changed after the country’s current-account deficit widened to a record last quarter.

SGX CNX Nifty Index futures for April delivery rose less than 0.1 percent to 5,722.0 at 9:32 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index on the National Stock Exchange of India Ltd. added 0.7 percent to 5,682.55 on March 28. The S&P BSE Sensex (SENSEX) index advanced 0.7 percent to 18,835.77. The Bank of New York Mellon India ADR Index of U.S.-traded shares gained 2.1 percent to 1,107.96. Indian markets were shut on March 29.

The Sensex completed its first quarterly loss since the three months ended December 2011, amid the weakest economic growth in a decade. The shortfall in India’s current-account widened to a record last quarter, government data showed on March 28, adding pressure on Prime Minister Manmohan Singh to extend a policy overhaul and attract foreign investment.

“The current account deficit is at a record and that’s a big concern for the rupee,” Arun Kejriwal, director at Mumbai- based Kejriwal Research & Investment Services, said by phone yesterday. “We expect the market to open lower.”

The deficit in the current account, the broadest measure of trade, was $32.6 billion in the three months ended Dec. 31, or 6.7 percent of gross domestic product, compared with a revised $22.6 billion gap from July through September, the Reserve Bank of India said in a statement on March 28. The median estimate of 12 economists in a Bloomberg News survey was for a deficit of $30.7 billion.

Sensex Valuation

The Sensex has fallen 3 percent this year, its first quarterly loss in five. The gauge trades at 12.7 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s 10.5 times.

Indian stocks advanced the most in two weeks on March 28, as traders closed bearish bets at the expiry of the monthly derivatives contract.

Foreigners bought $104 million of domestic stocks on March 26, extending this year’s purchases to $10.2 billion, data from the regulator show. Net inflows last year totaled $24.5 billion, the most among 10 Asian markets tracked by Bloomberg.

The earnings season for the final quarter of the fiscal year ending March 31 will begin with Infosys Ltd. (INFO), India’s second-largest software services provider, announcing results on April 12. Profits at 43 percent of the Sensex companies missed estimates in the three months through Dec. 31, compared with 40 percent in the previous two quarters, according to data compiled by Bloomberg.

“The next trigger for the markets is the corporate earnings,” Kishor Ostwal, managing director of CNI Research (CNIR) (India) Ltd., said by phone on March 29. “The current account deficit and other macroeconomic numbers suggest some tough measures are needed to boost the economy. Any bad news can trigger a sell-off as investors are very cautious. The positive thing is buying by foreign investors is still continuing.”

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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