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India’s Nifty Futures Swing Between Gains, Losses After Rebound

Indian (SENSEX) stock-index futures swung between gains and losses, signaling benchmark indexes may hold near a six-week high.

SGX CNX Nifty Index futures for April delivery fell less than 0.1 percent to 5,923.5 at 10:24 a.m. in Singapore. Indian markets were closed yesterday for a holiday. The underlying CNX Nifty (NIFTY) Index rose less than 0.1 percent to 5,836.90 on April 23, holding at its highest level since March 15. The S&P BSE Sensex index gained 0.1 percent to 19,179.36. The Bank of New York Mellon India ADR Index of U.S.-traded shares climbed 0.4 percent yesterday.

Indian shares have rallied since plunging to a seven-month low earlier this month as slowing wholesale-price inflation and falling commodity prices prompted speculation the Reserve Bank of India will cut interest rates next week, and overseas funds bought the most stocks in five weeks.

After the recent rebound, “there’s no great urgency to get into the market right now,” I.V. Subramaniam, a director at Quantum Asset Management Co., said in an interview with Bloomberg TV India. “We will invest if stock prices decline and earnings look better.”

Profits at the five Sensex companies that have reported March-quarter results so far have either matched or beaten analyst estimates. Net income at about 43 percent of the 30 index companies trailed forecasts in the three months ended Dec. 31, compared with 40 percent in the previous two quarters.

Foreign Inflows

Foreign funds bought a net $152 million of local shares on April 22, taking their net investment in stocks this year to $10.6 billion, data compiled by Bloomberg show. Funds bought a net $292.1 million worth of equities last week, the most in five weeks.

Inflows have accelerated as data on April 15 showed India’s inflation slowed to a 40-month low of 5.96 percent in March, increasing the scope for the central bank to cut rates, and as a slump in oil and gold prices cut import costs for the two commodities that helped fuel a record $32.6 billion current- account deficit in the December quarter.

The current-account gap, along with elevated prices, has deterred the RBI from further reducing borrowing costs after 25 basis-point cuts in January and March. The authority may pare its key rate by another 25 basis points at a May 3 review, according to 14 of 16 economists surveyed by Bloomberg.

Jet Airways

Jindal Steel & Power Ltd. (JSP), India’s second-biggest steelmaker, may today report a fourth-quarter profit of 9.7 billion rupees ($178 million), according to the median of 18 analyst estimates in a Bloomberg survey.

Jet Airways (India) Ltd. (JETIN) may be active after Etihad Airways PJSC agreed to buy a 24 percent stake in the Indian carrier for 20.6 billion rupees. Etihad will purchase 27.26 million shares at a cost of 754.74 rupees apiece, 32 percent higher than the closing price on April 23, Mumbai-based Jet said in an exchange statement.

The stake will help Etihad tap one of the world’s fastest- growing aviation markets, with travel forecast to triple by 2021. Indian carriers are seeking equity alliances after Prime Minister Manmohan Singh’s government last September allowed foreign carriers to buy holdings of as much as 49 percent. Jet shares rallied 4.5 percent to 573.15 rupees on April 23.

Mahindra & Mahindra Financial Services Ltd. (MMFS) may be active after the company reported net income of 3.34 billion rupees for the quarter ended March 31, beating the median estimate of 2.6 billion rupees in a Bloomberg survey of analysts. The stock was upgraded by HSBC Plc and Credit Suisse Group AG after posting earnings.

The Sensex has dropped 1.3 percent this year, and is valued at 12.9 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s 10.3 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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