India Nifty Futures Rise as Funds Extend Buying on Rates Outlook

Indian (SENSEX) stock-index futures gained as foreign funds extended this year’s record purchases amid signs corporate earnings are improving, and on speculation the central bank will cut borrowing costs next week.

SGX CNX Nifty Index futures for May delivery rose 0.1 percent to 5,930 at 10:15 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index jumped 1.4 percent to 5,916.30 yesterday, the highest close since March 11. The S&P BSE Sensex index gained 1.2 percent. The Bank of New York Mellon India ADR Index of U.S.-traded shares increased 0.3 percent.

Overseas funds were net buyers of $84 million of Indian stocks on April 23, taking this year’s net investment to $10.7 billion, an all-time high for the period, according to data compiled by Bloomberg. The Reserve Bank of India may pare its key interest rate by 25 basis points on May 3, according to 18 of 22 economists surveyed by Bloomberg, as inflation slows and declining commodity prices improve the government’s prospects of narrowing a record current-account deficit.

“Continued liquidity from foreign funds has boosted market sentiment along with anticipation of a rate cut in the upcoming RBI monetary meet,” Rakesh Goyal, senior vice-president at Bonanza Portfolio Ltd., wrote in an e-mailed note yesterday. “Global cues and quarterly results will continue to play major role in deciding near term market trend.”

Earnings Reports

Net income at one of the six Sensex companies that have reported March-quarter results so far has missed analyst estimates. Profits 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.

Jindal Steel & Power Ltd. (JSP), India’s second-biggest maker of the alloy, may be active after posting a fourth-quarter group profit of 7.6 billion rupees after markets closed yesterday, missing the 9.7-billion rupee median estimate in a Bloomberg survey of 18 analysts.

ICICI Bank Ltd. (ICICIBC), India’s largest private lender, may report net income of 22.91 billion rupees ($422 million) for the quarter ended March, according to a median of 43 analyst estimates in a Bloomberg survey. The stock rose for an 11th day yesterday, the longest winning streak since Sept. 20, 2005.

Maruti Suzuki India Ltd. (MSIL), the nation’s largest carmaker, may post a profit of 7.05 billion rupees for the fourth quarter, 40 analysts forecast in a Bloomberg survey.

Motorcycle maker Hero MotoCorp Ltd. (HMCL) may report net income of 5.02 billion rupees, according to a survey of 39 analysts.

The Sensex has lost 0.1 percent this year and is valued at 13.1 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

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.