India’s Nifty Index Futures Decline Before Derivatives Expiry

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

SGX CNX Nifty Index futures for November delivery fell 0.5 percent to 6,037 at 9:48 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index declined 0.9 percent to 6,059.10 yesterday. The S&P BSE Sensex lost 0.9 percent to 20,425.02. The Bank of New York Mellon India ADR Index of U.S.-traded shares slid 0.5 percent.

Indian futures contracts expire on the last Thursday of every month. The Sensex retreated yesterday amid signs foreign investment in Indian stocks is slowing. Data due on Nov. 29 may show the country’s economy grew 4.6 percent from a year earlier in the three months ended Sept. 30, according to a Bloomberg survey, capping the longest quarterly stretch of sub-5 percent growth since 2005.

“We expect the markets to be volatile ahead of the expiry,” Arun Kejriwal, a director at Kejriwal Research & Investment Pvt., said by phone yesterday. “There is no new trigger to drive the markets higher.”

The MSCI Asia Pacific Index dropped for a second day today after U.S. consumer confidence unexpectedly weakened this month.

International investors were net buyers of an average $36.7 million of local shares a day in the four days through Nov. 25, data from the market regulator show. That compares with an average inflow of $128 million a day in the previous 30 days starting Oct. 30.

Slowing Growth

India’s economic growth probably held below 5 percent for a fourth consecutive quarter, according to a Bloomberg survey of 35 analysts. The economy may continue to struggle, with Goldman Sachs Group Inc. predicting last week the central bank will further raise interest rates and the government facing pressure to curb spending, cut the fastest inflation among major emerging markets and pare the budget deficit.

Foreigners have bought $17.4 billion of domestic stocks this year, the most after Japan among 10 Asian markets tracked by Bloomberg.

The Sensex has advanced 5.1 percent this year and is valued at 13.4 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s 10.5 times.

Shares of Cairn India Ltd. (CAIR), which runs the nation’s biggest onshore oil and gas field, may be active. The company’s directors approved spending of as much as 57.25 billion rupees ($915 million) to buy back shares from the open market, at a price not exceeding 335 rupees a share. The stock dropped the most in a month yesterday, closing at 324.20 rupees.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net

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