India’s Nifty Futures Drop After Indexes Decline on Inflation

Indian stock-index futures fell after benchmark indexes capped the first two-day loss in more than two weeks.

SGX CNX Nifty Index futures for June delivery fell 0.2 percent to 7,545.5 at 10:06 a.m. in Singapore. The underlying CNX Nifty Index lost 0.1 percent to 7,533.55 yesterday. The S&P BSE Sensex (SENSEX) slid 0.2 percent. The Bank of New York Mellon India ADR Index of U.S.-traded shares dropped 0.4 percent.

The Sensex fell yesterday after data showed wholesale inflation quickened in May at the fastest pace in five months amid a jump in oil prices and forecasts for weaker-than-average monsoon rains, threatening Prime Minister Narendra Modi’s efforts to boost economic growth.

“The inflation figure is particularly worrying due to the fact that the monsoon rains this year are expected to be lower than average, and that the escalating tensions in Iraq could send crude oil prices soaring,” Raghu Kumar, co-founder of RKSV Ltd., wrote in an e-mail.

India’s wholesale-price inflation accelerated to 6.01% in May, the fastest pace since December. India’s consumer-price gains rose to a three-month high of 8.59 percent in April, the most among 18 Asian economies tracked by Bloomberg. Risks to the Reserve Bank of India’s forecast of 8 percent retail inflation by January 2015 “remain broadly balanced,” the central bank said on June 3.

Monsoon Concern

India’s monsoon, the main source of irrigation for the country’s 263 million farmers, was 49 percent lower than the 50-year average since June 1, the India Meteorological Department said yesterday. Weaker rainfall may curb farm output and boost food prices, hampering attempts to rein in Asia’s fastest consumer inflation.

Oil climbed to a nine-month high last week as escalating violence in Iraq fanned concern that supplies from OPEC’s second-largest producer may be disrupted. India imports almost 80 percent of the oil it uses.

The Sensex trades at 15.5 times projected 12-month profits, the most expensive in more than three years. The MSCI Emerging Markets Index is valued at a multiple of 11.

Overseas investors bought a net $ 420 million of Indian shares on June 12, taking this year’s inflows to $ 9.7 billion, the most among eight Asian markets tracked by Bloomberg.

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

You may also like...

Discussion on India’s Nifty Futures Drop After Indexes Decline on Inflation