India Stock Futures Rise as U.S. Manufacturing Boosts Confidence

India Stock Futures Rise
An Indian petrol pump attendant fills a motorcycle tank at a fuel station in Siliguri. Shares of Bharat Petroleum Corp., India’s second-biggest state refiner, may move as the company is offering to sell 11,000 metric tons of naphtha for loading in January. Photographer: Diptendu Dutta/AFP/Getty Images

India’s stock futures rose, signaling benchmark indexes may extend the biggest gains in two weeks, as the fastest pace of U.S. manufacturing growth in six months bolstered confidence in the global economy.

SGX S&P CNX Nifty Index futures for January delivery advanced 0.1 percent to 4,781.5 at 10:25 a.m. in Singapore. The futures are derived from the underlying S&P CNX Nifty Index, which climbed 2.8 percent to 4,765.30 yesterday. The BSE India Sensitive Index, or Sensex, added 2.7 percent to 15,939.36. Both gauges jumped the most yesterday since Dec. 21.

A U.S. factory index from the Institute for Supply Management climbed to 53.9 last month from 52.7 in November, data from the group showed yesterday. The figures added to reports showing stronger manufacturing in India, China, the U.K. and Australia. India’s manufacturing industry grew the most in six months, a Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics showed on Jan. 2.

“The Indian economy has tremendous resilience,” Nirmal Jain, chairman of brokerage India Infoline Ltd., said in a Bloomberg UTV interview yesterday. “The stock market runs ahead of the macro fundamentals.”

HSBC and Markit Economics are due to release their purchasing managers’ index for the services industries today. Their purchasing managers gauge for manufacturing rose to 54.2 from 51 in November, according to a Jan. 2 statement.

Gas Discoveries

Reliance Industries Ltd. may be active today after people with knowledge of the matter said the company and partner BP Plc won government approval to spend $1.5 billion to develop gas discoveries. Shares of Bharat Petroleum Corp., India’s second-biggest state refiner, may move as the company is offering to sell 11,000 metric tons of naphtha for loading in January, according to a document obtained by Bloomberg News.

The Sensex slumped 25 percent in 2011, the most since 2008, on concern a slumping rupee and record interest-rate increases will worsen the effects of Europe’s debt crisis on earnings. The gauge trades at 13.9 times estimated earnings, down from 19.4 times at the end of 2010. The MSCI Emerging Markets Index is valued at 9.6 times.

India’s stock market had joined the “cheapest 4 club” based on price-to-book and return-on-equity after China, Korea, Hong Kong, Credit Suisse Group AG analysts led by Sakthi Siva wrote in a report from the brokerage today. The analysts were reviewing their “underweight” rating on Indian equities, they said in the report.

Overseas investors sold $512 million from equities in 2011, on concern a slowdown in the U.S. and Europe’s debt crisis may erode company profits, data from the Securities & Exchange Board of India show. That compares with a record inflow of $29.4 billion in 2010. Foreign funds sold a net 391 million rupees ($7.4 million) of Indian stocks on Jan. 2.

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