India’s Nifty Futures Fall After Sensex Climbs to Two-Year High

India’s (SENSEX) stock futures dropped, signaling benchmark indexes may decline after surging to the highest in more than two years yesterday.

SGX CNX Nifty Index futures for May delivery fell 0.2 percent to 6,152.5 at 9:48 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index jumped 2.5 percent to 6,146.75 yesterday, the highest close since Jan. 3, 2011. The S&P BSE Sensex index advanced 2.5 percent. The Bank of New York Mellon India ADR Index of U.S.-traded shares rose 0.8 percent.

Stocks climbed yesterday amid speculation the central bank may cut lenders’ reserve-requirement ratios after inflation slowed to a more than three-year low, pushing the Sensex’s valuation to the highest level in seven months.

“At the current levels, valuations are near the long-term average and will need the support of government reforms to move up,” Sanjeev Zarbade, vice president of private client group research at Kotak Securities Ltd., wrote in an e-mail yesterday.

The Sensex has rallied 11 percent since sinking to a seven-month low on April 9, as foreign funds extended purchases of Indian stocks amid monetary easing by global central banks. The gauge is valued at 13.9 times forecast 12-month profits, the most expensive since October, compared with the MSCI Emerging Markets Index’s 10.6 times.

Shares of Tata Communications Ltd. (TCOM) may be active after the company said yesterday it will terminate its American Depositary Receipts program and delist from the New York Stock Exchange.

Earnings Forecasts

Motorcycle maker Bajaj Auto Ltd. (BJAUT) may report today fourth-quarter net income of 7.1 billion rupees ($130 million), according to the median estimate of 42 analysts in a Bloomberg survey.

Profits at just two of the 15 Sensex companies that have reported March-quarter earnings have trailed 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.

Overseas funds bought a net $84 million of shares on May 14, taking this year’s net inflows to a net $12.82 billion, data from the market regulator show. That’s a record for the period, according to data compiled 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

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.