India’s Nifty Futures Drop After Indexes Fall Most in a Week

Indian (SENSEX) stock-index futures dropped after benchmark indexes declined the most in a week yesterday.

SGX CNX Nifty Index futures for December delivery fell 0.5 percent to 6,154.5 at 10:38 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index slipped 0.8 percent to 6,166.65 yesterday. The S&P BSE Sensex declined 0.7 percent. The Bank of New York Mellon India ADR Index of U.S.-traded shares lost 1 percent.

Indian stocks slid yesterday, led by banks, after the U.S. Federal Reserve said it will start unwinding stimulus that had boosted fund flows into emerging markets. The Reserve Bank of India kept its benchmark interest rate unchanged this week amid the fastest rise in consumer prices in at least two years and the slowest economic growth in more than a decade.

“We see the markets trading in a narrow range as there is no clarity on interest rates, inflation and gross domestic product growth,” K.K. Mital, head of portfolio management services at Globe Capital Market Ltd., said by phone from New Delhi. “Every rally is being used as an opportunity to sell and every selloff as an opportunity to buy.”

RBI Governor Raghuram Rajan unexpectedly kept the benchmark repurchase rate at 7.75 percent on Dec. 18, saying the central bank will act at its next meeting on Jan. 28 if inflation does not ease in the next round of data releases.

Home Loans

Wholesale prices rose in November at the fastest pace in 14 months and consumer prices gained the most in data going back to January 2012. A separate report showed industrial production contracted in October by more than economists predicted. Economic growth of 4.8 percent in the three months ended September was below 5 percent for a fourth quarter.

Shares of State Bank of India, the nation’s biggest lender, and Housing Development Finance Corp. may be active after the two companies lowered home-loan rates.

Sugar producers including Bajaj Hindusthan Ltd. and Balrampur Chini Mills Ltd. may move after India’s cabinet cleared interest-free loans of more than 60 billion rupees ($966 million) to the sugar industry.

Global investors bought a net $304.6 million of local shares on Dec. 18, data from the market regulator showed yesterday. That took this year’s inflow to $19.2 billion, the most in Asia after Japan.

The Sensex has climbed 6.6 percent this year, the best performer among the four largest emerging markets, and trades at 13.4 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s 10.4 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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