Indian stock-index futures dropped after the benchmark equity gauges jumped to all-time highs.
SGX CNX Nifty Index futures for March delivery fell 0.5 percent to 6,522 as of 10:37 a.m. in Singapore. The underlying CNX Nifty Index on the National Stock Exchange of India Ltd. surged 2 percent to 6,526.65 on March 7, a record. The S&P BSE Sensex rallied 1.9 percent to 21,919.79, an all-time high. The Bank of New York Mellon India ADR Index of U.S.-traded shares declined 1.1 percent to 1,236.47.
The Sensex’s 14-day relative-strength index climbed to 74.8 on March 7, above the threshold of 70 that some investors consider to be an overbought level. The gauge soared 3.8 percent last week for its best weekly advance since the period ended April 19 amid speculation the opposition Bharatiya Janata Party is gaining support before general elections starting next month. The MSCI Asia Pacific Index retreated 1 percent today after weaker-than-expected Chinese trade and inflation data stoked concern over the nation’s economic outlook.
“Last week’s rally has been breathtaking. We expect the markets to cool off a bit,” Arun Kejriwal, a director with Kejriwal Research & Investment Pvt., said by phone from Mumbai today. “We expect the markets to remain in a positive frame till the election given that the foreign inflows have been very strong.”
Overseas funds bought a net $212 million of Indian shares on March 6, extending this year’s inflows to $807.8 million, data compiled by Bloomberg show. They bought $20 billion last year, the most in Asia after Japan, the data show.
The Bharatiya Janata Party and its allies, favored by investors seeking a revival in economic growth, may secure as many as 232 out of the 543 seats being contested in the lower house of the parliament, according to a poll released March 6 by the Centre for the Study of Developing Societies. That’s one more from the last survey in January.
Shares of Ranbaxy Laboratories Ltd. may move after the Indian drugmaker said it’s pulling two batches of its generic version of Pfizer Inc.’s Lipitor drug from the U.S. market, the second recall of the cholesterol-lowering medicine in 15 months. The company said it’s withdrawing 64,626 bottles of atorvastatin calcium after a product complaint was received by a pharmacist, the U.S. Food and Drug Administration said.
Indian Oil Corp., the nation’s biggest refiner, may be in focus after it agreed to buy a 10 percent stake in Petroliam Nasional Bhd.’s Canadian natural gas fields and a planned export project.
The Sensex has risen 3.5 percent this year and trades at 14.1 times projected 12-month earnings, compared with the average multiple of 14.5 over the past five years. The MSCI Emerging Markets Index has declined 4.3 percent so far in 2014 and is valued at 10.2 times.