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India’s Nifty Futures Rise After Inflation, Rupee Support Plans

Indian (SENSEX) stock-index futures gained after data showed inflation cooled and the government announced additional measures to trim the current-account deficit and support the rupee.

SGX CNX Nifty Index futures for August delivery rose 0.2 percent to 5,607 at 10:12 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index climbed 0.8 percent to 5,612.40 yesterday. The S&P BSE Sensex added 0.8 percent, the steepest gain since July 18. The Bank of New York Mellon India ADR Index of U.S.-traded shares fell 0.3 percent.

Consumer prices grew 9.64 percent in July from a year earlier, compared with 9.87 percent in June, according to data released after the market closed yesterday. The median forecast in a Bloomberg survey of analysts was for a 9.71 percent increase. The government plans to curb some imports and lure more capital inflows, Finance Minister Palaniappan Chidambaram said in parliament yesterday. The currency weakened to a record low against the dollar on Aug. 6.

“Data was definitely better,” Daphne Roth, Singapore-based head of Asia equity research at ABN Amro Private Bank, which oversees about $207 billion, said by phone today. “Consumer price inflation is not doing so bad.”

Rupee Measures

India has implemented a series of measures since last month to fight a 10 percent slump in the rupee this year that may spur inflation. Curbs are planned on imports of gold, silver and some non-essential items, while rules governing overseas commercial borrowings and certain deposit programs for non-residents will be eased, Chidambaram said yesterday.

Industrial output shrank 2.2 percent in June, compared with an estimated 1.1 percent decline, data showed yesterday, underscoring the risks facing the Indian economy.

Shares of Hindalco Industries Ltd. (HNDL) may be active today. India’s second-biggest aluminum maker may report net income of 3.26 billion rupees ($53.2 million) for the quarter ended June 30, according to the median estimate of 27 analysts in a Bloomberg survey. That compares with profit of 4.25 billion rupees in the same period last year.

Earnings Reports

Tractor maker Mahindra & Mahindra Ltd. (MM) may announce quarterly profit rose to 8.48 billion rupees, from 7.26 billion rupees a year ago, according to a Bloomberg survey of 38 analysts.

Tata Steel Ltd. (TATA), India’s biggest producer, may say net income dropped to 12.5 billion rupees from 13.6 billion rupees in the first quarter last year, according to 10 analysts surveyed by Bloomberg.

About 48 percent of Sensex companies that have reported earnings so far for the June quarter missed analyst estimates. That compares with 27 percent for the three months ended March and 43 percent in the quarter through December, data compiled by Bloomberg show.

The Sensex has lost 2.5 percent this year and trades at 13.3 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s 10.1 times.

International investors sold a net $55 million of Indian shares on Aug. 8, a second day of net outflows, data from the regulator show. That pared this year’s inflow to $12.5 billion, the data show, the second-biggest among 10 Asian markets tracked 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: Michael Patterson at mpatterson10@bloomberg.net

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