Indian (SENSEX) stock-index futures dropped after U.S. jobs and factory data missed estimates and amid concerns the U.S. Federal Reserve will scale back monetary stimulus.
SGX CNX Nifty Index futures for June delivery fell 0.8 percent to 5,894 at 10:08 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index rose 0.1 percent to 5,923.85 yesterday. The S&P BSE Sensex also advanced 0.1 percent. The Bank of New York Mellon India ADR Index of U.S.-traded shares slumped 1.7 percent.
U.S. companies hired fewer workers than expected in May, data showed yesterday, while factory orders fell short of estimates. The Sensex has lost 2.5 percent since May 22, when Fed Chairman Ben S. Bernanke said the central bank could consider reducing its bond purchases, prompting concerns record foreign inflows into Indian stocks may slow. The U.S. accounted for 11 percent of India’s exports in the fiscal year ended March 2012, trade ministry data show.
“Investors are grappling with some near-term changes in the global markets, notably the possible end of quantitative easing,” Ridham Desai, head of India equity research at Morgan Stanley, said in an interview with Bloomberg TV India yesterday.
The Sensex advanced 0.7 percent this year as monetary easing by global central banks boosted flows into emerging-market assets. Overseas investors bought $46.8 million rupees of local stocks on June 4, data from the market regulator showed yesterday, taking this year’s inflows to $15.2 billion, a record for the period.
The Sensex is valued at 13.5 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s 10.2 times.
Stocks of jewelry makers including Titan Industries Ltd. (TTAN) and Gitanjali Gems Ltd. (GITG) may be active after the government increased a tax on bullion imports to curb a record current-account deficit. The duty will rise to 8 percent from 6 percent, effective immediately, Revenue Secretary Sumit Bose said yesterday.
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