India’s Nifty Futures Signal Equities to Extend Three-Week Rally

Indian (SENSEX) stock-index futures gained, signaling equities may extend a three-week rally.

SGX CNX Nifty Index futures for May delivery rose 0.6 percent to 5,987 at 10:31 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index dropped 0.9 percent to 5,944 on May 3. The S&P BSE Sensex index tumbled 0.8 percent to 19,575.64. The Bank of New York Mellon India ADR Index of U.S.-traded shares fell 0.8 percent to 1,068.23.

The Sensex rallied 7.3 percent the past three weeks as speculation grew the Reserve Bank of India would cut interest rates at a May 3 policy review. While the RBI lowered borrowing costs that day, it said there was “little space” for further easing, causing the Sensex to fall from a three-month high. The possibility of easing is “practically non-existent,” RBI Governor Duvvuri Subbarao said in a Bloomberg TV India interview in Mumbai on May 4.

“The overall market trend is positive, however, profit- booking on rallies may be seen,” Nidhi Saraswat, senior research analyst at Bonanza Portfolio Ltd., wrote in an e-mail on May 3. “Global cues and quarterly results shall be eyed for further market direction.”

The MSCI Asia Pacific excluding Japan Index climbed 1 percent today after faster-than-forecast U.S. employment growth bolstered optimism in the world’s largest economy. The U.S. accounted for 11 percent of India’s exports in the six months ended September 2011, trade ministry data show.

HSBC Holdings Plc and Markit Economics are due to release a purchasing managers’ index for India’s services industries today.

Corporate Earnings

Jaiprakash Associates Ltd. (JPA) may move after reporting fourth- quarter net income of 1.24 billion rupees ($23 million), missing some analysts estimates. Adani Power Ltd. (ADANI) and Great Eastern Shipping Co. are expected to report earnings today.

The Sensex has rebounded 7.4 percent since reaching a seven-month low on April 9. The gauge has climbed 0.8 percent in 2013 and trades at 13.2 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s 10.5 times.

Foreign funds bought a net $300 million of local shares on May 2, taking their net investment in equities this year to $11.6 billion, a record for the period, according to data compiled by Bloomberg.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at

To contact the editor responsible for this story: Darren Boey at

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