Indian’s Nifty Stock-Index Futures Drop on U.S. Budget Concerns

Indian (SENSEX) stock-index futures fell as Asian equities sank on concern the U.S. government is headed for a shutdown.

SGX CNX Nifty Index futures for October delivery slid 1.1 percent to 5,824.00 at 10:15 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index on the National Stock Exchange of India Ltd. dropped 0.8 percent to 5,833.20 on Sept. 27. The S&P BSE Sensex retreated 0.8 percent to 19,727.27, taking last week’s losses to 2.7 percent. The Bank of New York Mellon India ADR Index of U.S.-traded shares fell 1.3 percent to 1,007.17.

The MSCI Asia Pacific Index dropped 1.4 percent on concern a U.S. government shutdown will endanger talks over raising the debt limit. India’s benchmark gauge halted a four-week rally amid concerns the central bank may tighten monetary-policy further after Governor Raghuram Rajan’s comment that inflation is still high.

“There are concerns the U.S. government may come to a standstill,” Amar Ambani, head of research at India Infoline Ltd., said by e-mail. “Selling pressure is seen especially in the banking stocks after Rajan said the RBI is still worried about high inflation.”

The House of Representatives voted 231-192 yesterday to stop many of the Affordable Care Act’s central provisions for one year, tying it to an extension of U.S. government funding through Dec. 15. Should the Senate reject the bill today the government could be shut down from tomorrow.

Core inflation remains high, Rajan told reporters last week during a visit to Frankfurt, Germany.

India’s Controller General of Accounts will release the nation’s fiscal deficit data through August today, while the Reserve Bank of India will provide details on the April-June current account deficit data.

Index Valuations

The Sensex has risen 1.6 percent this year and trades at 13.6 times projected 12-month earnings, compared with the five-year average of 14.1 times, data compiled by Bloomberg show. The MSCI Emerging Markets Index is trading at 10.4 times.

Overseas funds bought a net $ 65.6 million of domestic shares on Sept. 26, data from the regulator showed. That took this year’s net inflow to $ 13.5 billion, the second-highest among 10 Asian markets tracked by Bloomberg. They pulled $ 3.7 billion from local equities in the three months to Aug. 31 as capital fled emerging markets amid prospects of the Federal Reserve paring its record stimulus.

Editors: Chan Tien Hin, Richard Frost

To contact the reporter on this story: Santanu Chakraborty in Mumbai at

To contact the editor responsible for this story: Richard Frost at

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