India VIX Caps Monthly Advance as Futures Rollover Below Average

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The benchmark gauge of Indian option prices posted its first monthly gain in three after foreigners sold stocks for a fifth day amid concern earnings growth will slow.

The VIX Index ended little changed at 17.23 at the close in Mumbai, capping a monthly increase of 19 percent. Global investors sold $240 million of local stocks on Tuesday, a fifth day of outflows, according to data compiled by Bloomberg. Investors extended 68 percent of their Nifty April futures contracts to May, data available at 5:05 p.m. showed, compared with a six-month average of 74 percent at expiry.

The Nifty has dropped 3.7 percent in April, its second monthly retreat. S&P BSE Sensex company earnings for the January-to-March period will decline for a second quarter, according to Bloomberg estimates. The stock losses on Thursday came after the U.S. Federal Reserve left open the possibility of an interest-rate increase this year.

“Pressure is mounting on the markets in the backdrop of local and global factors,” Gaurang Shah, a vice president at Geojit BNP Paribas Financial Services Ltd., told Bloomberg TV India on Thursday. “Earnings by and large is more of a disappointment than a cheer.”

The Nifty fell 0.7 percent to 8,181.50 and the S&P BSE Sensex slid 0.8 percent to 27,011.31. Nifty futures for April delivery dropped 0.7 percent to 8,183.25. The May contract lost 0.4 percent to 8,259.

Equity derivative contracts in India expire on the last Thursday of every month.

Global investors sold $31 million of index futures on Wednesday for a fifth day of outflows, and $198 million of index options, a third day of withdrawals.

The Nifty is valued at 15.2 times its 12-month projected earnings, compared with a multiple of 12.6 for the MSCI Emerging Markets Index.

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