Indian (SENSEX) stock-index futures dropped after interest-rate increases by emerging-market central banks failed to stem currency declines and the U.S. Federal Reserve pressed on with stimulus cuts.

SGX CNX Nifty Index futures expiring today sank 1.5 percent to 6,031.0 at 10:06 a.m. in Singapore. The February contract lost 1.5 percent. The underlying CNX Nifty Index on the National Stock Exchange of India Ltd. fell 0.1 percent to 6,120.25 yesterday. The S&P BSE Sensex slid 0.2 percent to 20,647.30, a fourth day of declines. The Bank of New York Mellon India ADR Index of U.S.-traded shares tumbled 1.4 percent to 1,119.10.

While interest-rate increases from Turkey to South Africa spurred early gains in emerging-market assets yesterday, the rallies reversed as investors speculated the moves won’t be enough to curb capital outflows. India, which also raised borrowing costs this week, lured $ 20 billion of stock inflows last year amid unprecedented easing by the Fed.

“India markets will react negatively to the Fed tapering, in line with other global markets,” Surya Narayan Nayak, head of equity research at Sun Capital Advisory Services Pvt., said by phone in Mumbai. “In the second half of the day, markets are likely to be volatile as the futures expire today.”

The Sensex has retreated 2.5 percent this month, poised for its steepest monthly drop since August. On January 28, the Reserve Bank of India unexpectedly increased the policy rate by a quarter-point to 8 percent to curb inflation.

Fed Taper

The Fed said it will trim monthly bond purchases to $ 65 billion, sticking to a plan for a gradual withdrawal from its unprecedented easing that had fueled inflows into emerging markets.

Motorcycle-maker Hero MotoCorp Ltd. (HMCL) may say its third quarter profit increased 23 percent to 6 billion rupees ($ 96 million), according to the median estimate of 39 analysts in a Bloomberg survey.

Global investors sold a net $ 213 million of domestic shares on Jan. 28, data compiled by Bloomberg show.

The Sensex climbed 9 percent in 2013, the best annual gain among the four-largest emerging markets, and trades at 12.9 times projected 12-month earnings. The MSCI Emerging Markets Index trades at 9.1 times.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net