India’s Nifty Futures Signal Stocks May Extend Last Week’s Drop

Indian stock-index futures fell, signaling benchmark indexes may decline before inflation data.

SGX CNX Nifty Index futures for April delivery slid 0.4 percent to 5,502.0 at 10:24 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index on the National Stock Exchange of India Ltd. slid 1.2 percent to 5,528.55 on April 12. The S&P BSE Sensex index sank 1.6 percent to 18,242.56. The Bank of New York Mellon India ADR Index of U.S.-traded shares lost 8.6 percent to 1,022.47.

The Sensex fell the most in more than a month on April 12, completing a second week of declines. Software companies led the drop as Infosys Ltd. (INFO), India’s second-largest software services exporter, plunged the most in a decade after the company forecast annual sales will rise slower than analysts estimated.

“Corporate earnings and management commentary will be keenly analyzed for clues on meaningful improvement in business sentiment,” Amar Ambani, head of research at IIFL Ltd., wrote in an e-mail on April 12.

Investors should switch to Tata Consultancy Services Ltd. from Infosys on better revenue growth prospects, Deutsche Bank AG. said in a report. Infosys was cut to underperform at Sunidhi Consultancy Services, data compiled by Bloomberg show.

India’s benchmark wholesale price inflation probably eased 6.27 percent, a 40-month low, according to the median of estimates by 29 analysts in a Bloomberg News survey. The report is due today.

Indian (SENSEX) stocks may also drop after data today showed Chinese economic growth expanded less than economists’ estimated. The MSCI Asia Pacific Index slipped 0.7 percent today.

Foreign Funds

Foreign funds sold a net $114 million worth of Indian shares on April 9, a sixth day of net outflows, the longest stretch since May, data compiled by Bloomberg show. Overseas investors are paring this year’s record equity purchases as sales of goods from cars to cement drop amid the slowest economic growth in a decade, a record current-account deficit and the fastest inflation among major emerging nations.

Net income at about 43 percent of the 30 Sensex firms trailed forecasts in the three months ended Dec. 31, compared with 40 percent in the previous two quarters.

The Sensex has dropped 6.1 percent this year and is valued at 12.3 times projected 12-month profits, compared with a multiple of 13.5 times at the beginning of 2013. The MSCI Emerging Markets Index trades at 10.3 times.

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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