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India’s Nifty Futures Rise After Indexes Hit Records on Inflows

Indian stock-index futures gained after benchmark indexes rose to records yesterday.

SGX CNX Nifty Index futures for July delivery added 0.2 percent to 7,758.5 at 9:34 a.m. in Singapore. The underlying CNX Nifty Index climbed 1.2 percent to 7,725.15 yesterday. The S&P BSE Sensex (SENSEX) gained 1.3 percent. The Bank of New York Mellon India ADR Index of U.S.-traded shares increased 1.1 percent to the highest level since January 2011.

Overseas investors bought a net $375.4 million of Indian shares on July 1, the largest daily inflow since June 12, according to data compiled by Bloomberg. Foreign funds have been buying Indian stocks on expectations the new government under Prime Minister Narendra Modi will boost growth in Asia’s third-largest economy. The government releases its first federal budget on July 10.

“Heavy foreign inflows and hopes of more initiatives in the union budget are supporting the markets,” Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd., wrote in an e-mail. “Indicators are showing an overbought situation. We may witness profit-booking in the coming days.”

The Sensex is valued at 15.8 times projected 12-month profits, the most expensive level in more than three years. The MSCI Emerging Markets Index trades at a multiple of 11.

International investors bought a net $10.3 billion this year, the second-highest among eight Asian markets tracked by Bloomberg, after Taiwan.

The Sensex rallied 14 percent in the quarter ended June 30, the biggest gain since the three months ended September 2009, on expectations Modi will curb Asia’s fastest consumer inflation and boost an economy growing at near the slowest pace in a decade.

Shares of Hero Motocorp Ltd. (HMCL) may be active. India’s biggest motorcycle manufacturer by revenue reported yesterday that sales rose 7.8 percent in June from a year earlier, and warned that a weaker-than-average monsoon may hurt demand.

To contact the reporter on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net

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

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