India’s Nifty Futures Rise as Output Data Spur Rate Speculation

Indian (SENSEX) stock-index futures advanced after an unexpected drop in the nation’s industrial output spurred speculation the Reserve Bank of India will refrain from raising interest rates.

SGX CNX Nifty Index futures for January delivery rose 0.4 percent to 6,205 at 10:32 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index on the National Stock Exchange of India Ltd. gained less than 0.1 percent to 6,171.45 on Jan. 10. The S&P BSE Sensex advanced 0.2 percent to 20,758.49. The gauge fell 0.5 percent last week, its second straight weekly decline. The Bank of New York Mellon India ADR Index of U.S.-traded shares jumped 2.7 percent to 1,171.69.

Output at India’s factories, utilities and mines fell 2.1 percent in November from a year earlier, the government said Jan. 10. The median of 37 estimates in a Bloomberg News survey was for a 0.8 percent rise. The data adds to pressure on Prime Minister Manmohan Singh to bolster the economy ahead of elections this year. The Standard & Poor’s 500 Index rose as a weaker-than-estimated jobs report eased concern that the Federal Reserve may accelerate the pace of stimulus cuts.

“The RBI is likely to hold rates and support growth-boosting measures as inflation is seen moderating and factory output data shows economic growth is not picking up,” Surya Narayan Nayak, head of equity research at Sun Capital Advisory Services Pvt., said by phone from Mumbai today. “There is optimism that the U.S. Fed too will go slow on the tapering and that will be positive for fund flows to emerging markets.”

Policy Review

Central bank Governor Raghuram Rajan last month surprised economists by holding the benchmark rate at 7.75 percent instead of adding to increases totaling 50 basis points since taking office in September. The authority meets for its next policy review on Jan. 28.

The Sensex has declined 2 percent this year amid a slowdown in manufacturing output, the fastest consumer-price inflation in at least two years and economic growth that’s stayed below 5 percent for four straight quarters. The measure rose 9 percent last year.

Global investors bought a net $ 28.1 million of local shares on Jan. 9, data from the market regulator show. They invested $ 20 billion last year, the most in Asia after Japan, according to data compiled by Bloomberg. Net purchases in 2012 were $ 24.6 billion, the data show.

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

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

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