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India’s Nifty Futures Rise as Foreign Funds Extend Record Buying

Indian stock futures gained as overseas funds extended record purchases of the nation’s equities, and before a report today expected to show industrial production data expanded in March.

SGX CNX Nifty Index futures for May delivery rose 0.2 percent to 6,079 at 10:02 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index lost 0.3 percent to 6,050.15 yesterday, snapping a three-day advance. The S&P BSE Sensex slid 0.3 percent, paring a fourth straight weekly advance. The Bank of New York Mellon India ADR Index of U.S.-traded shares slumped 1.5 percent, the biggest loss since April 15.

Overseas funds bought a net $194 million of local shares on May 8, taking their investment this year to $12.4 billion, a record for the period, data compiled by Bloomberg show. A report today may show industrial output expanded 2.4 percent in March, from 0.6 percent in February, according to a Bloomberg survey of 26 analysts.

“If money keeps pouring in, the markets could climb higher,” Sajiv Dhawan, managing director at brokerage JV Capital Services, told Bloomberg TV India yesterday. “At some stage, even the foreign institutional investors will get tired, so we may see a correction.”

Car Sales

NTPC Ltd. (NTPC), India’s largest electricity producer, may today report fourth-quarter net income of 25.7 billion rupees ($473.8 million), according to a median of 29 analyst estimates in a Bloomberg survey.

Profit at just two of the 13 Sensex companies that have reported March-quarter results so far has trailed analyst estimates, data compiled by Bloomberg show. That compares with about 43 percent that missed forecasts in the three months ended Dec. 31, and 40 percent in the previous two quarters.

Shares of Indian (SENSEX) automakers may be active after an industry body reports today car sales figures for April. Sales fell 6.7 percent in the year ended March, the most since 2001, as high funding costs cooled demand.

The Sensex rallied 9.7 percent from a seven-month low from April 9 through May 8 as foreign funds extended purchases amid monetary easing by global central banks, pushing the gauge’s valuation to the highest in more than three months on May 8. Foreigners bought a net $802 million worth of stocks last week, the most since the period ended Feb. 8, and a net $565 million this week through May 8.

The gauge trades at 13.8 times forecast 12-month profits, compared with the MSCI Emerging Markets Index’s 10.6 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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