India Nifty Stock Futures Fall, Signaling Share Decline

Indian stock-index futures dropped, signaling benchmark indexes may decline, after shares advanced to a two-year high yesterday.

SGX S&P CNX Nifty Index futures for January delivery fell 0.2 percent to 6,052 at 10:18 a.m. in Singapore. The underlying S&P CNX Nifty Index on the National Stock Exchange of India Ltd. gained 1.2 percent to 6,024.05 yesterday. The BSE India Sensitive Index, or Sensex, closed at a two-year high, extending last year’s 26 percent gain. The Bank of New York Mellon India ADR Index of U.S.-traded shares rose for a fourth day, adding 0.7 percent.

Tata Consultancy Services Ltd., India’s largest software exporter, reported third-quarter profit that beat analysts’ estimates after the market closed yesterday. Indian stocks jumped after the benchmark inflation rate climbed by the slowest pace in three years, widening the scope of the central bank to ease monetary policy.

“Stocks may take a breather after the sharp rally took indexes close to an all-time high,” Kishor Ostwal, managing director at CNI Research Ltd., said by phone today. “Earnings numbers at banks and automakers due this week will determine further market direction.”

Inflation grew 7.18 percent in December from a year ago, the slowest since December 2009, according to official data released yesterday. The Reserve Bank of India signaled Dec. 18 that monetary policy must shift toward aiding economic growth, predicting inflation will moderate in an economy expanding at the weakest pace in a decade. The central bank meets for its next policy review on Jan. 29.

Tata Earnings

Tata Consultancy’s third-quarter profit surged 23 percent to 35.5 billion rupees ($652 million) in the three months ended Dec. 31 as emerging-market sales expanded. That compared with the 34 billion-rupee median of 38 analyst estimates.

Stocks also gained yesterday after India delayed a clampdown on tax avoidance until 2016 after the plans spooked foreign investors and threatened to hamper a push to revive growth.

The so-called General Anti-Avoidance Rules, or GAAR, will take effect the year starting April 1, 2016, Finance Minister Palaniappan Chidambaram said at a briefing in New Delhi yesterday. A panel set up by the government to review the measure, which was due to be enforced from 2013, recommended the delay.

Axis Reports

Axis Bank Ltd., India’s fourth-largest private lender by market value, may report net income of 12.8 billion rupees for the quarter ended Dec. 31 today, according to the median estimate of 30 analysts in a Bloomberg survey. That compares with profit of 11 billion rupees in the same period last year. Axis was named among the top Indian stocks for 2013 by Deutsche Bank AG in a report today.

Net incomes of the 30 Sensex companies may grow 11 percent from a year ago in the December quarter, after rising 7 percent in the previous three months, Kotak Institutional Equities said in a Jan. 3 report. Profit for 40 percent of the Sensex firms missed analysts’ estimates for the September quarter, the same as for the quarter ended June, data compiled by Bloomberg show.

The Sensex trades at 15.8 times estimated earnings, the highest reading since March. The MSCI Emerging Markets Index is valued at 11 times, according to data compiled by Bloomberg.

Overseas funds were net buyers of Indian stocks for an 11th straight day on Jan. 11, purchasing a net $142 million of stocks, according to data from the market regulator. Foreigners have bought a net $1.6 billion of shares this year, almost three times the level at the same time in 2012.

The Indian stock gauge had its biggest annual rally since 2009 last year as Prime Minister Manmohan Singh opened the economy to more foreign investments in the past four months to boost an economy growing at the slowest pace in three years and to avert a credit-rating downgrade. The steps prompted offshore funds to invest a net $24.5 billion into domestic shares last year, the highest among 10 Asian markets tracked by Bloomberg.

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