India’s Nifty Futures Decline Before Wholesale Inflation Report

Indian stock-index futures dropped before the release of wholesale inflation data today.

SGX CNX Nifty Index futures for March delivery fell 0.6 percent to 6,488 at 10:06 a.m. in Singapore. The underlying CNX Nifty Index slid 0.4 percent to 6,493.10 yesterday. The S&P BSE Sensex lost 0.4 percent, heading for its first weekly decline in four weeks. The Bank of New York Mellon India ADR Index of U.S.- traded shares slumped 2.1 percent.

Wholesale prices likely eased to 4.9 percent in February, the slowest since May, according to the median estimate of 45 analysts in a Bloomberg survey before data due today. Reserve Bank of India Governor Raghuram Rajan has raised interest rates three times since taking over the central bank in September to cool Asia’s fastest inflation. The authority meets for its next policy review on April 1.

“We expect wholesale prices to remain at elevated levels, restricting room for the RBI to reduce rates at its next meeting,” Nilesh Karani, vice president at Magnum Equity Broking, said by phone. “Markets will consolidate at these levels as stocks had a sharp run.”

The MSCI Asia Pacific Index, the benchmark for the region, dropped to a one-month low today as at least four investment banks cut their growth forecasts for China’s economy.

Consumer prices grew 8.1 percent in February, compared with the median 8.3 percent estimate in a Bloomberg survey, data showed on March 12.

Tata Power

Shares of Tata Power Ltd. may be active. Standard & Poor’s raised its outlook on the company’s credit rating to positive from negative, citing favorable regulatory developments and debt-reduction measures to improve liquidity and cash flow.

Tech Mahindra Ltd. may move. Foreign institutional investors can now own as much as 48 percent of the company, up from a previous 45 percent limit, the central bank said in a statement yesterday.

Overseas funds bought a net $148.6 million of Indian shares on March 12, extending this year’s inflows to $1.03 billion, the most in Asia after Taiwan, according to data compiled by Bloomberg show.

The Sensex has risen 2.9 percent this year and trades at 13.9 times projected 12-month earnings, compared with the average multiple of 14.5 over the past five years. The MSCI Emerging Markets Index is valued at 10 times.

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