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India’s Nifty Futures Drop as Asian Stocks Slump on Fed Outlook

Indian stock-index futures declined as overseas investors extended a sell-off of local shares and the U.S. Federal Reserve Chairman Ben S. Bernanke said bond purchases may be cut.

SGX CNX Nifty Index futures for June delivery dropped 1.1 percent to 5,752 at 9:47 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index on the National Stock Exchange of India Ltd. rose 0.2 percent to 5,822.25 yesterday. The S&P BSE Sensex gained 0.1 percent to 19,245.70. The Bank of New York Mellon India ADR Index of U.S.-traded shares lost 1.5 percent.

The MSCI Asia Pacific Index slumped today after Bernanke said the U.S. central bank may start reducing bond purchases later this year if risks to the U.S. economy abate. The Sensex has lost 4.1 percent since Bernanke first signaled on May 22 that the Fed could consider paring its $85 billion-a-month stimulus program. Foreign funds were net sellers of Indian (SENSEX) stocks for a sixth day on June 18.

“The sooner-than-expected winding down of U.S. stimulus is weighing on market sentiment,” Kishor Ostwal, managing director at CNI Research Ltd., said by phone today. “Commodity stocks and consumer plays are likely to be hit the most.”

Foreigners sold a net $96 million of local shares on June 18, data from the regulator show. That reduced this year’s net purchases to $14.8 billion, still a record for the period, data compiled by Bloomberg show.

The Sensex has dropped 0.9 percent this year and trades at 13.2 times projected 12-month profits compared with the MSCI Emerging Markets Index’s 9.6 times, the cheapest since July.

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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