Indian stock-index futures dropped after benchmark gauges climbed for a second day to the highest level in a week yesterday.

SGX CNX Nifty Index futures for August delivery fell 0.3 percent to 7,748 at 10 a.m. in Singapore. The underlying CNX Nifty Index (NIFTY) rose 0.8 percent to 7,746.55 yesterday, the highest close since July 30. The S&P BSE Sensex (SENSEX) advanced 0.7 percent. The Bank of New York Mellon India ADR Index of U.S.-traded shares slid 0.2 percent.

The Reserve Bank of India left its benchmark interest rate unchanged at 8 percent for a third straight meeting yesterday as retail inflation slowed and Prime Minister Narendra Modi released food stocks to offset the risk of higher prices from a weak monsoon. Modi’s three-month-old government is pushing to stem price gains to allow the central bank to lower one of Asia’s highest policy interest rates, which threatens to damp growth in the region’s third-biggest economy.

“The RBI on hold shows there’s no quick fix for India,” Andrew Holland, chief executive officer at Ambit Investment Advisors Pvt, wrote in an e-mail. “Markets will head south as there is no news to keep momentum going. The Nifty may fall to 7,400 in the worst case.”

RBI Governor Raghuram Rajan cut the proportion of deposits banks must invest in government debt, allowing them to lend more. The central bank won’t hold rates “high any longer than necessary,” and curbing inflation will create the best conditions for growth, he said after the policy decision.

Hero Earnings

Shares of Hero MotoCorp Ltd. (HMCL), India’s biggest two-wheeler maker, may be active. The company reported after markets closed yesterday that profit for the quarter ended June 30 rose 2.5 percent from a year earlier to 5.63 billion rupees ($ 92.5 million), compared with the median analyst estimate of 6.17 billion rupees in a Bloomberg survey.

Nine of the 17 Sensex companies that have announced results so far for the June quarter have beaten or matched forecasts.

International investors bought a net $ 70 million of Indian stocks on Aug. 4, the first net purchases in four days, according to data compiled by Bloomberg. That extended this year’s inflow to $ 11.7 billion, the most among eight Asian markets tracked by Bloomberg.

The Sensex has jumped 22 percent this year and is valued at 15.4 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s multiple of 11.

To contact the reporter on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net

To contact the editors responsible for this story: Michael Patterson at mpatterson10@bloomberg.net Matthew Oakley, Phani Varahabhotla