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

Indian (SENSEX) stock-index futures gained, signaling benchmark indexes may extend a rally after climbing to the highest since November 2010 yesterday, as overseas funds continued record purchases of local shares.

SGX CNX Nifty Index futures for May delivery rose 0.5 percent to 6,203 at 10:13 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index on the National Stock Exchange of India Ltd. rose 0.4 percent to 6,169.90 yesterday. The S&P BSE Sensex index advanced 0.2 percent. The Bank of New York Mellon India ADR Index of U.S.-traded shares fell 0.4 percent.

Foreigners bought a net $311 million of Indian stocks on May 15, the most since Feb. 7, according to data compiled by Bloomberg. That takes this year’s net investment to $13.1 billion, an all-time high for the period, the data show.

“Foreign funds are likely to increase their India allocation compared with other emerging markets,” Anita Gandhi, a director at Arihant Capital Markets Ltd. in Mumbai, said by phone yesterday.

The Sensex has rallied 11 percent since sinking to a seven-month low on April 9, as foreign funds extended purchases amid monetary easing by global central banks, and as slowing inflation and weakening economic growth prompted the central bank to cut interest rates on May 3 for a third time this year.

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.

ITC Ltd. (ITC), India’s largest cigarette maker, may report today fourth-quarter net income of 18.97 billion rupees ($346 million), according to the median estimate of 31 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.

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

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