Indian (SENSEX) stock-index futures swung between gains and losses after data showed an unexpected expansion in industrial production and consumer price growth holding at almost 10 percent.
SGX CNX Nifty Index futures for September delivery fell 0.3 percent to 5,855 at 9:55 a.m. in Singapore after rising as much as 0.6 percent. The underlying CNX Nifty (NIFTY) Index declined 1.1 percent to 5,850.70 yesterday. The S&P BSE Sensex fell 1.1 percent, paring this week’s gain to 2.7 percent. The Bank of New York Mellon India ADR Index of U.S.-traded shares lost 1.7 percent. The rupee snapped its longest winning streak in almost a year, weakening 0.3 percent to 63.535 per dollar. One-month rupee forwards rose 0.2 percent to 64.35 today.
Indian industrial production strengthened 2.6 percent in July, compared with the estimated 0.9 percent in a Bloomberg survey of analysts. The data bolsters new central bank Governor Raghuram Rajan’s fight against a slumping rupee and slowing economic growth. Rajan, who reviews interest rates for the first time next week, is under pressure to support the currency and avoid a surge in import costs that would fuel price pressures. Consumer prices grew 9.52 percent in August, compared with 9.64 percent the previous month, data showed.
“Fundamentally things haven’t changed much in terms of the growth outlook and there are still headwinds in terms of growth, interest rates and inflation,” Mahesh Patil, co-chief investment officer with Mumbai-based Birla Sun Life Asset Management Co., which manages $ 13.8 billion in assets, told Bloomberg TV India.
Wholesale Prices
Data may show on Sept. 16 that wholesale prices expanded 5.7 percent from a year earlier in August, compared with 5.79 percent in July, according to the median estimate of 20 analysts in a Bloomberg survey.
The Reserve Bank of India meets for its first policy review under Rajan’s governorship on Sept. 20. Former RBI governor Duvvuri Subbarao left the benchmark repurchase rate unchanged at 7.25 percent at the previous two meetings. The authority began tightening monetary policy in July to stem a slide in the currency that pushed the rupee to a record low on Aug. 28.
The Sensex has increased 1.8 percent this year in local currency terms and is valued at 13.9 times projected 12-month earnings, compared with the five-year average of 14.1 times, data compiled by Bloomberg show. It has lost 12 percent this year in dollar terms. The MSCI Emerging Markets Index trades at 10.5 times.
Asia’s third-largest economy may expand 5.5 percent in the year to March 2014, versus 5 percent in the previous 12-month period, the weakest pace since 2003, according to central bank estimates. The 10-year average is about 8 percent.
Overseas investors bought a net $ 85 million of domestic shares on Sept. 11, a fifth straight day of purchases, data from the regulator show. That boosted this year’s net inflow to $ 12.3 billion, the second-highest among 10 Asian markets tracked by Bloomberg.
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