India’s Nifty Futures Gain After Biggest Rally in Seven Months

Indian (SENSEX) stock-index futures gained, signaling benchmark indexes may extend an advance after the biggest rally in seven months yesterday.

SGX CNX Nifty Index futures for April delivery rose 0.4 percent to 5,720.5 at 10:13 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index advanced 2.2 percent to 5,688.95 yesterday, the largest jump since Sept. 21. The S&P BSE Sensex index rose 2.1 percent. The Bank of New York Mellon India ADR Index of U.S.- traded shares rallied 3.5 percent.

Shares jumped yesterday as this week’s slump in gold and oil prices may narrow India’s record current-account deficit, easing pressure on the rupee, further damping inflation and boosting scope for a further reduction in interest rates. Proposals for India’s biggest opening to foreign investment since the 1990s may be ready in June, Finance Minister Palaniappan Chidambaram said yesterday.

“The atmosphere is conducive for investment in equities,” Raamdeo Agrawal, joint managing director at Motilal Oswal Financial Services Ltd. in Mumbai, said in an interview yesterday. “Valuations aren’t expensive and interest rates are expected to go down from here.”

The Sensex has dropped 3.5 percent this year and is valued at 12.6 times projected 12-month profits, compared with this year’s peak of 13.8 times in January. The MSCI Emerging Markets Index trades at 10.4 times.

Foreign Investment

Shares of Reliance Industries Ltd. (RIL), the second-biggest stock on the Sensex by weighting, may move after the company’s quarterly earnings beat forecasts. Net income for the three months ended March 31 grew to 55.9 billion rupees ($1.01 billion) from 42.4 billion a year ago, the company reported after the market closed yesterday. That exceeded the 55.3- billion rupee median estimate of 20 analysts.

Chidambaram said last month many restrictions in about two dozen industries from telecommunications to banking can be removed or relaxed. The ruling coalition is trying to lure foreign capital to fund the current-account deficit and fight the weakest economic growth since 2003.

Gains in wholesale prices slowed to 5.96 percent last month, the smallest gain in 40 months, government data showed on April 15. While the Reserve Bank of India cut funding costs in March for a second time this year, it has said lingering inflation is curbing scope for further reductions. The bank’s next policy review is on May 3.

Earnings Reports

Tata Consultancy Services Ltd. (TCS), India’s largest software maker, may report that quarterly net income rose to 36.1 billion rupees, from 29.3 billion a year earlier, according to the median estimate of 41 analysts in a Bloomberg survey.

Yes Bank Ltd. (YES) may report three-month earnings increased to 3.6 billion rupees, according to the median estimate of 27 analysts surveyed by Bloomberg, compared with 2.72 billion a year earlier.

Net incomes for the 30 Sensex companies in the quarter ended March 31 may fall 0.8 percent from a year ago, according to estimates compiled by Bloomberg. That would be the first decrease in profits since a 1.8 percent drop in the three months ended June 2010, the data show.

Shares of Indian media companies Sun TV Network Ltd. (SUNTV), Dish TV India Ltd. (DITV) and Zee Entertainment Enterprises Ltd. (Z) may be active after the stocks were rated outperform in new coverage at Credit Suisse Group AG.

Foreign funds bought a net $17.1 million of Indian shares on April 12, data compiled by Bloomberg show, extending this year’s net investment in equities to $10.2 billion, a record for the period according to data compiled by Bloomberg. Inflows last year totaled $24.5 billion, the most among 10 Asian markets tracked by Bloomberg.

To contact the reporter on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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