Nifty Futures Signal Indian Equities to Snap Three-Day Advance

Indian (SENSEX) stock-index futures dropped, signaling equities may snap their longest winning streak in five weeks.

SGX CNX Nifty Index futures for July delivery fell 0.4 percent to 5,865.5 at 10:19 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index climbed 1 percent to 5,898.85 yesterday, its third day of gains. The S&P BSE Sensex jumped 0.9 percent to 19,577.39, the highest level since June 3. The Bank of New York Mellon India ADR Index of U.S.-traded shares rose 0.5 percent.

The Sensex advanced 3.7 percent in the past two days after the government agreed to raise natural-gas prices as part of a policy overhaul to revive an economy that grew at a decade-low rate of 5 percent in the year ended March 31. The rally drove the Sensex to 13 times projected 12-month profits, the highest valuation in three weeks, data compiled by Bloomberg show.

“Over the medium-to-long term, reform initiatives on the domestic front and interest-rate movements will be important triggers,” Dipen Shah, the head of private client research at Kotak Securities Ltd., wrote in an e-mail.

India’s cabinet approved a gas pricing formula recommended in December by a panel led by Chakravarthy Rangarajan, chief of the prime minister’s Economic Advisory Council, Oil Minister Veerappa Moily said June 28. The new rates will be effective from April 1, 2014, as a weighted average of traded gas prices in the U.S. and U.K. and imports by Japan and India in 2013, Oil Secretary Vivek Rae said.

Foreign Investors

The MSCI All-Country World Index rallied 0.7 percent yesterday as manufacturing data from the U.S., Japan and the U.K. bolstered prospects for a pickup in global growth. The Institute for Supply Management’s New York factory index is due today. The U.S. and the European Union accounted for 28 percent of India’s exports in the fiscal year ended March 2012, according to government data.

The Sensex has slumped 3.5 percent from a two-year high reached on May 17 as the prospect of reduced U.S. monetary stimulus prompted global investors to pull money from emerging-market assets. The gauge’s forward price-earnings ratio is still 33 percent higher than the MSCI Emerging Markets Index’s multiple of 9.8.

Overseas funds pulled $ 139 million from domestic shares on June 27, a 13th day of net sales, data compiled by Bloomberg show. Foreign investors withdrew a net $ 1.76 billion last month through June 27, poised for the first month of net sales since May 2012, the data show.

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

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net

Enlarge image Nifty Futures Signal Indian Equities to Snap Three-Day Advance

Nifty Futures Signal Indian Equities to Snap Three-Day Advance

Nifty Futures Signal Indian Equities to Snap Three-Day Advance

Adeel Halim/Bloomberg

Security officers stand guard next to a bronze bull statue at the entrance to the Bombay Stock Exchange (BSE) in Mumbai.

Security officers stand guard next to a bronze bull statue at the entrance to the Bombay Stock Exchange (BSE) in Mumbai. Photographer: Adeel Halim/Bloomberg

SGX Nifty

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