India’s Nifty Futures Rise After Consumer-Price Inflation Eases

Indian stock-index futures gained after data showed consumer-price inflation slowing for a third straight month and an unexpected rise in factory output.

SGX CNX Nifty Index futures for March delivery increased 0.1 percent to 6,559 at 9:40 a.m. in Singapore. The underlying CNX Nifty Index rose 0.1 percent to 6,516.90 yesterday. The S&P BSE Sensex (SENSEX) also added 0.1 percent. The Bank of New York Mellon India ADR Index of U.S.-traded shares tumbled 2 percent, the biggest loss since Feb. 3.

Consumer prices grew 8.1 percent in February, compared with the median 8.3 percent estimate in a Bloomberg survey, data showed yesterday. Reserve Bank of India Governor Raghuram Rajan has raised interest rates three times since taking over the central bank in September to cool Asia’s fastest inflation. Industrial production expanded 0.1 percent in January, compared with a forecast for a 0.9 percent contraction.

“Consumer inflation data is positive and will boost sentiment,” Deven Choksey, managing director at KR Choksey Shares & Securities Ltd., said in a phone interview. “Data is signaling that the decline in growth is somewhat arrested. We expect lower inflation and better industrial production data in the future.”

India’s economic growth slowed last quarter, holding below 5 percent and denting the Congress Party’s chances of extending its decade-long rule in national elections beginning April 7. Gross domestic product rose 4.7 percent from a year earlier in the three months ended Dec. 31, compared with 4.8 in the previous quarter.

Looming Defeat

Prime Minister Manmohan Singh’s party is headed for its worst-ever electoral performance as elevated price pressures, slowing growth and a series of corruption scandals erode support, opinion polls show.

International investors bought a net $ 250.3 million of Indian shares on March 11 as foreign funds returned after the biggest net outflow in eight months the previous day. That extended this year’s inflows to $ 884.7 million, data compiled by Bloomberg show.

The Sensex has risen 3.2 percent this year and trades at 14 times projected 12-month earnings, compared with the average multiple of 14.5 over the past five years. The MSCI Emerging Markets Index is valued at 10.2 times.

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

To contact the editors responsible for this story: Michael Patterson at Matthew Oakley, Phani Varahabhotla

SGX Nifty

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