India’s Nifty Futures Decline on Crude Before Inflation Data

Indian stock-index futures fell before the release of wholesale-price inflation data, as crude oil prices increased.

SGX CNX Nifty Index futures for June delivery dropped 0.3 percent to 7,542 at 10:51 a.m. in Singapore. The underlying CNX Nifty Index on the National Stock Exchange of India Ltd. slumped 1.4 percent to 7,542.10 on June 13, the most since Feb. 3. The S&P BSE Sensex (SENSEX) sank 1.4 percent to 25,228.17. The Bank of New York Mellon India ADR Index of U.S.-traded shares dropped 1.3 percent to 1,316.13.

The government will release wholesale price-growth data at about noon today. Concern that monsoon rains will be below normal this year and surging oil prices threaten to raise Asia’s second-fastest inflation and hinder growth. Prime Minister Narendra Modi’s government will release its first budget in early July, the Mint newspaper reported.

“Going ahead, we see the monsoon progress and the budget to be the two important triggers for the markets,” Dipen Shah, head of private-client group research at Kotak Securities Ltd., wrote in an e-mail on June 13. “However, if there is a continued rise in crude price, it will be a negative from the current account deficit, rupee and inflation perspective.”

Monsoon, Oil

Monsoon rains from June to September are forecast to be below normal this year, the weather department said last week. A 10 percent drop in rainfall may add more than a percentage point to the consumer-price index, and a “full blown drought” risks shaving as much as half a percentage point off economic growth, according to HSBC Holdings Plc.

Oil climbed today, with West Texas Intermediate extending a 4.1 percent weekly gain, as the escalation of violence in Iraq stoked concern crude supplies will be disrupted. The army killed more than 279 rebels yesterday in Iraq, OPEC’s second-largest producer, as the prospect of civil war intensifies with Sunni Muslim insurgents controlling territory north of Baghdad. India imports about 80 percent of its crude.

The nation’s central bank has said further policy tightening won’t be warranted if consumer-price inflation stays on course to hit 8 percent in January 2015 and 6 percent a year later. If disinflation is faster than anticipated “it will provide headroom for an easing of the policy stance,” it said.

The Sensex trades at 15.5 times projected 12-month profits, near the most expensive level in three years, and compares with the MSCI Emerging Markets Index’s multiple of 11.

Foreigners have bought a net $ 9.7 billion of local shares this year, the most among eight Asian markets tracked by Bloomberg, on optimism the new government will boost efforts to revive economic growth.

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

To contact the editors responsible for this story: Michael Patterson at Phani Varahabhotla, Richard Frost

SGX Nifty

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