India Nifty Futures Fall as Indexes May Extend Third Weekly Drop

Indian (SENSEX) stock-index futures dropped, signaling benchmark indexes will extend a three-week slide.

SGX CNX Nifty Index futures for June delivery fell 0.6 percent to 5,619.50 at 10:11 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index on the National Stock Exchange of India Ltd. rose 0.2 percent to 5,667.65 on June 21. The S&P BSE Sensex gained 0.3 percent to 18,774.24. The Bank of New York Mellon India ADR Index of U.S.-traded shares rose 1.2 percent to 944.68.

The Sensex sank 2.1 percent last week, a third week of declines, as overseas funds sold the most Indian equities in almost two years on June 20. Federal Reserve Chairman Ben S. Bernanke said last week bond buying that fueled gains in markets globally may be pared this year should risks to the U.S. economy continue to ebb. India’s rupee plunged to a record low on June 20 and completed its biggest weekly loss since September 2011.

“Withdrawal of funds by overseas investors and consequent weakening of the rupee is keeping stocks under pressure,” Rajendra Wadher, director at PRB Securities Ltd., said by phone yesterday. “Liquidity flows are likely to taper down over a period of time and improvement in macros is needed to improve the corporate earnings outlook. Valuations are looking attractive from a long term investment view.”

The Sensex trades at 12.8 times projected 12-month profits, a two-month low, compared with the MSCI Emerging Markets Index’s 9.4 times, data compiled by Bloomberg show.

Foreigners pulled a net $ 358 million from domestic shares on June 20, the highest since Aug. 9, 2011, data released by the regulator show. The sales extend withdrawals from stocks in June to $ 760 million, putting funds on course to end 12 months of net buying, data compiled by Bloomberg show. That reduced this year’s net purchases to $ 14.3 billion, still a record for the period, data compiled by Bloomberg show.

Foreigners have been net sellers in only two of the past 13 years, based on data compiled by Bloomberg going back to 2000.

“Markets are getting sold as if there’s no tomorrow, Rajesh Cheruvu, chief investment officer at RBS Private Banking India, said in a phone interview. “This weakness is likely to continue for at least one or two weeks more.”

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

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

Enlarge image India Nifty Futures Fall as Indexes May Extend Third Weekly Drop

India Nifty Futures Fall as Indexes May Extend Third Weekly Drop

India Nifty Futures Fall as Indexes May Extend Third Weekly Drop

Adeel Halim/Bloomberg

A security officer stands guard next to a bronze bull statue at the entrance to the Bombay Stock Exchange. The Sensex sank 2.1 percent last week, a third week of declines.

A security officer stands guard next to a bronze bull statue at the entrance to the Bombay Stock Exchange. The Sensex sank 2.1 percent last week, a third week of declines. Photographer: Adeel Halim/Bloomberg

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