India’s Nifty Index Futures Decline Before Derivatives Expiry

Indian stock-index futures dropped before markets open after a public holiday, and before the expiry of derivatives contracts tomorrow.

SGX CNX Nifty Index futures for July delivery fell 0.2 percent to 7,755.5 at 10 a.m. in Singapore. The most-active August contract lost 0.2 percent to 7,792. The underlying CNX Nifty Index dropped 0.5 percent to a 7,748.70 on July 25, retreating from a record. The S&P BSE Sensex also declined 0.5 percent. Indian markets were closed yesterday for a holiday. The Bank of New York Mellon India ADR Index of U.S.-traded shares dropped 1 percent yesterday.

The Sensex has surged 23 percent this year, the biggest advance among the world’s 10 biggest equity markets, as international investors poured money into Indian stocks on expectations a new government under Prime Minister Narendra Modi will spur an economy growing at near the slowest pace in a decade. Indian derivatives contracts expire on the final Thursday of every month.

“Though the benchmark is somehow holding around record highs, stocks have been witnessing noticeable profit-taking in the past few sessions,” Jayant Manglik, president of retail distribution at Religare Securities Ltd., wrote in an e-mail.

Shares of Bharti Airtel Ltd., India’s largest mobile services company, may be active. The company reported yesterday that profit jumped 61 percent from a year earlier to 11.08 billion rupees ($184 million) in the quarter ended June 30. That was still lower than the 12 billion-rupee median estimate in a Bloomberg survey of analysts.

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ITC Ltd., Asia’s second-biggest tobacco company, said first-quarter net income climbed 16 percent to 21.86 billion rupees, compared with the median analyst forecast of 22.4 billion rupees. Sales grew 25 percent, the most in eight quarters.

Sesa Sterlite Ltd., the India-based metals and oil producer, posted quarterly profit that missed analyst estimates as earnings at unit Cairn India Ltd. fell to the lowest in three years. Net income was 3.76 billion rupees in the first quarter, the Panaji, Goa-based unit of Vedanta Resources Plc said yesterday, compared with the 12 billion-rupee forecast of analysts in a Bloomberg survey.

The numbers aren’t comparable with a year earlier as the merger of copper producer Sterlite Industries (India) Ltd. and iron-ore miner Sesa Goa Ltd., both owned by billionaire Anil Agarwal, to form Sesa Sterlite took effect in August.

Seven of the 13 Sensex companies that have announced results so far for the June quarter have beaten or matched forecasts.

Foreign investors bought $20.1 million of local stocks on July 25, taking this year’s inflows to $12.1 billion, the most among eight Asian markets tracked by Bloomberg.

The Sensex has surged 23 percent this year and is valued at 15.5 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s multiple of 11.2.

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