India’s Nifty Index Futures Decline Before Derivatives Expiry

Indian (SENSEX) stock-index futures dropped before the expiry of derivatives contracts today.

SGX CNX Nifty Index futures for October delivery fell 0.4 percent to 5,913 at 10:04 a.m. in Singapore. The September contract dropped 0.3 percent. The underlying CNX Nifty (NIFTY) Index lost 0.3 percent to 5,873.85 yesterday. The S&P BSE Sensex decreased 0.3 percent. The Bank of New York Mellon India ADR Index of U.S.-traded shares also declined 0.3 percent.

The Sensex’s 30-day volatility, a measure of price swings, held at the highest level since August 2009 yesterday. The index has veered between a one-year low and a 34-month high in the past four weeks. The gauge tumbled as the rupee weakened to a record low last month and rallied after central bank Governor Raghuram Rajan outlined plans to bolster the financial industry and stabilize the currency, and the Federal Reserve refrained from cutting stimulus.

“Markets are expected to remain cautious ahead of the derivatives expiry,” Amar Ambani, head of research at India Infoline Ltd., wrote in an e-mail yesterday. “The indexes may move in a tight range with no major cues to look forward to.”

Overseas funds bought a net $5 million of domestic shares on Sept. 24, data from the regulator showed yesterday. International investors have bought a net $1.97 billion of the nation’s stocks this month, poised for the first monthly net inflow since May. They pulled out $3.7 billion in the three months to Aug. 31 as capital fled emerging markets amid concerns the U.S. Federal Reserve would curtail record stimulus.

Shares of Infosys Ltd. (INFO), India’s second-largest software services company, may be active after the stock was raised to outperform from neutral at Robert Baird, with a 12-month price target of $58 for the company’s American Depositary Receipts. The shares gained 0.5 percent to $48.87 yesterday.

The Sensex has risen 2.2 percent this year in rupee terms and is valued at 13.7 times projected 12-month earnings, compared with the five-year average of 14.1 times, data compiled by Bloomberg show. It has lost 10 percent this year in dollar terms. The MSCI Emerging Markets Index is trading at 10.6 times.

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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