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India’s Nifty Futures Drop, Signaling Shares May Snap 4-Day Gain

Indian (SENSEX) stock-index futures dropped, signaling benchmark indexes may snap a four-day advance.

SGX CNX Nifty Index futures for April delivery lost 0.5 percent to 5,741.5 at 10:02 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index rose 0.8 percent to 5,748.10 yesterday, its highest close in two weeks. The S&P BSE Sensex index increased 0.9 percent to 19,040.95. The Bank of New York Mellon India ADR Index of U.S.-traded shares jumped 1.7 percent.

The Sensex has lost 2 percent this year amid the country’s weakest economic growth in a decade, a record current-account deficit and the highest inflation rate among major emerging economies. The earnings reporting season for the quarter ended March 31 begins next week. About 43 percent of company profits missed forecasts in the three months through Dec. 31, compared with 40 percent the previous two quarters.

“There is a lot of pessimism in the markets and rightly so, as there are many issues that the markets are worried about,” Sashi Krishnan, chief investment officer at Birla Sun Life Insurance Co. in Mumbai, said in an interview with Bloomberg TV India yesterday.

Shares of Ashok Leyland Ltd. (AL), which makes commercial vehicles, may be active after the company reported yesterday that sales slid to 14,020 units in March, from 14,266 units a year earlier.

Idea Cellular Ltd. (IDEA) may move after Daiwa Capital Markets cut the stock to sell from underperform, saying Indian telecom shares are likely to drop this year as the industry struggles to control costs and controversy over spectrum renewal charges intensifies.

Foreign funds extended net purchases of Indian stocks this year through April 1 to $10.4 billion, a record for the period, according to data compiled by Bloomberg show. Inflows last year totaled $24.5 billion, the most among 10 Asian markets tracked by Bloomberg.

The Sensex trades at 12.9 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s 10.4 times.

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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