India’s Nifty Index Futures Drop Amid Second Day of Asia Losses

Indian stock-index futures dropped amid a second day of losses in Asian equities. Local exchanges reopen after a public holiday yesterday.

SGX CNX Nifty Index futures for August delivery fell 0.9 percent from the close on Aug. 14 to 5,702 at 9:54 a.m. in Singapore. Futures dropped 0.6 percent from yesterday. The underlying CNX Nifty (NIFTY) Index climbed 0.8 percent to 5,742.30 on Aug. 14. The S&P BSE Sensex rose 0.7 percent. The Bank of New York Mellon India ADR Index of U.S.-traded shares tumbled 2.4 percent yesterday. The rupee weakened 0.4 percent to 61.4437 on Aug. 14, compared with a record low of 61.8063 on Aug. 6.

The Reserve Bank of India cut the amount local companies can invest without approval and tightened the remittance limit for residents after the market closed on Aug. 14. It was the latest in a series of moves since last month that have so far failed to halt a slide in the rupee as the government wrestles with an unprecedented current-account deficit and an economy that grew at the slowest pace in a decade in the year ended March 31.

“The rupee has been weakening even after the liquidity measures taken by the RBI, largely due to the high current-account deficit,” said Dipen Shah, head of private client group research at Kotak Securities Ltd. “The government has relaxed some rules to encourage more flows. These have not had any impact and further steps are needed to either curtail the deficit or finance it and stem the depreciation of the rupee.”

MSCI Revisions

Asian stocks fell today, paring a weekly advance, as investors shied away from riskier assets after an unexpected drop in U.S. jobless claims fueled speculation the Federal Reserve will cut stimulus next month.

Foreigners pulled $3 billion from stocks and bonds last month amid concerns over the Fed’s stimulus plans, leaving the rupee vulnerable to a current-account gap that widened to a record 4.8 percent of gross domestic product in the year ended March.

Shares of Indian companies from Hero MotoCorp Ltd. (HMCL) to ICICI Bank (ICICIBC) Ltd. may move after MSCI Inc. announced quarterly revisions to its equity indexes on Aug. 14.

Mahindra & Mahindra Financial Services Ltd. (MMFS) was added to MSCI Global Standard Indices. Hero MotoCorp and Wipro Ltd. (WPRO) had their weightings in MSCI indexes increased, while ICICI Bank, Lupin Ltd., Adani Enterprises Ltd. and Godrej Consumer Products Ltd. were reduced.

The Sensex has lost 0.3 percent this year and trades at 13.7 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s 10.1 times.

About 47 percent of Sensex companies missed analysts’ earnings estimates for the June quarter, compared with 27 percent for the three months ended March and 43 percent in the quarter through December, data compiled by Bloomberg show.

International investors bought a net $12.4 million of Indian (SENSEX) shares on Aug. 13, data from the regulator show. That took this year’s inflow to $12.53 billion, 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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