India’s Nifty Futures Drop After Benchmark Gains to 3-Week High

Indian (SENSEX) stock-index futures dropped after the benchmark index rose to a three-week high yesterday.

SGX CNX Nifty Index futures for October delivery fell 0.4 percent to 6,030 at 9:44 a.m. in Singapore. The underlying CNX Nifty Index rose 1.3 percent to 6,007.45 yesterday. The S&P BSE Sensex advanced 1.3 percent to the highest level since Sept. 20. The Bank of New York Mellon India ADR Index of U.S.-traded shares increased 2.1 percent, the most since Sept. 18.

The Sensex advanced yesterday after data showed India’s trade deficit shrank to the narrowest in 30 months. Infosys Ltd. (INFO), the nation’s second-largest software services exporter, will be the first company on the index to report earnings for the three months through Sept. 30 tomorrow.

“Investors will keenly watch the upcoming earnings season, not just the headline numbers but the underlying variables, to get a sense of the medium-term direction of the market,” BNP Paribas SA analysts led by Manishi Raychaudhuri wrote in a report e-mailed today.

Revenue expansion for Sensex companies will rebound sharply after falling for the last three quarters, Religare Capital Markets wrote in a note to clients on Oct. 7.

Profit of dollar-denominated sectors, including software, health care and metals, in the Nifty (NIFTY) index likely grew 19 percent in the September quarter from a year earlier, Motilal Oswal (MOFS) Securities Ltd., said in a note dated Oct. 1.

Earnings Forecasts

“Engineering, capital goods, oil and gas and power utilities are forecast to be the biggest drags on the market’s earnings performance,” according to the BNP report. “Autos, information technology, metals and telecoms are forecast to have significantly superior earnings growth.”

About 47 percent of Sensex companies missed analysts’ profit estimates for the June quarter, compared with 27 percent three months earlier, data compiled by Bloomberg show.

The nation’s trade gap narrowed to $ 6.76 billion last month, the least since March 2011, from $ 10.9 billion in August. Reserve Bank of India Governor Raghuram Rajan said on Oct. 8 that he expects an improvement in the country’s economic performance as exports and major investment projects revive.

International investors bought a net $ 38.3 million of local stocks on Oct. 8, taking this year’s inflows to $ 13.8 billion, data from the regulator showed yesterday.

The Sensex has risen 4.2 percent this year and is valued at 13.9 times projected 12-month profits, compared with the five-year average of 14.1 times. The MSCI Emerging Markets Index is trading at 10.5 times.

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

To contact the editor responsible for this story: Michael Patterson at

SGX Nifty

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