India’s Nifty Stock-Index Futures Rise Before Derivatives Expiry

Indian (SENSEX) stock-index futures gained, signaling benchmark indexes may rise for a second day, before the expiry of monthly derivatives contracts tomorrow.

SGX CNX Nifty Index futures for June delivery climbed 0.3 percent to 5,616 at 10:12 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index rose 0.3 percent to 5,609.10 yesterday. The S&P BSE Sensex gained 0.5 percent. The Bank of New York Mellon India ADR Index of U.S.-traded shares jumped 2.5 percent, the biggest advance since April 16.

The MSCI Asia Pacific Index gained for the first time in three days today after better-than-forecast U.S. data boosted the outlook for the world’s biggest economy. Indian derivatives contracts expire on the last Thursday of every month.

“We expect a volatile trading session ahead of the expiry,” Kishor Ostwal, managing director at CNI Research Ltd., said by phone yesterday. “At best we’ll see some value-buying and short covering at lower levels.”

Indian Finance Minister Palaniappan Chidambaram said yesterday revisions to some of the caps placed on foreign direct investment in India should be in place by the second or third week of July, a move that will help money flow back into the country, he said.

The Securities & Exchange Board of India also eased registration rules for overseas investors and tightened share buyback norms for companies, the market regulator said in a statement yesterday after its board approved the recommendations of a government panel. Foreign investors will no longer need to have prior registration to trade in India.

The moves come at a time when the nation’s currency is trading near a record low and its current-account deficit is the widest among BRIC countries.

Foreign Outflows

Foreign investors are on course for the first monthly net sales of Indian stocks since May 2012. Overseas funds pulled $ 256 million from domestic shares on June 24, a 10th day of outflows, data compiled by Bloomberg show. That pared this year’s purchases to $ 13.8 billion, still a record for the period.

Foreign funds have also cut rupee debt holdings by $ 5.85 billion since May 22, when U.S. Federal Reserve Chairman Ben. S. Bernanke first signaled the central bank’s bond-buying program could be scaled back.

Shares of Bajaj Auto Ltd. (BJAUT), India’s second-biggest maker of motorcycles, may be active today after the company received notice from a union that work will be stopped at its Chakan plant on June 28 because of a dispute over an employee share-purchase scheme.

The Sensex has dropped 4.1 percent this year, reversing gains after climbing to a two-year high on May 17, as foreign funds extended a sell-off of the nation’s shares and the rupee weakened on the prospect of the U.S. paring monetary stimulus. The gauge trades at 12.4 times projected 12-month profits, near to the cheapest level since April, compared with the MSCI Emerging Markets Index’s 9.3 times.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at

To contact the editor responsible for this story: Darren Boey at

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