Indian (SENSEX) stock-index futures gained after the nation’s current-account deficit widened less than forecast in the second quarter.
SGX CNX Nifty Index futures for October delivery rose 0.5 percent to 5,794 at 9:52 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index fell 1.7 percent to 5,735.30 yesterday. The S&P BSE Sensex declined 1.8 percent. The Sensex still climbed 4.1 percent in September, snapping a three-month decline. The Bank of New York Mellon India ADR Index of U.S.-traded shares lost 1.4 percent. Financial markets in India are closed tomorrow for a holiday.
India’s current-account deficit widened to $ 21.8 billion in the three months through June, compared with the $ 23 billion median estimate in a Bloomberg survey of 26 analysts, data showed after markets closed yesterday. The government has tightened curbs on gold imports to pare the deficit from a record $ 87.8 billion in the fiscal year ended March to support a currency that’s weakened 12 percent versus the dollar in 2013.
“The current-account numbers will relieve some of the pressures on the rupee and monetary policy,” Kishor Ostwal, managing director at CNI Research Ltd., said in an interview today. “If the trend is sustained then it will give room for the Reserve Bank of India to ease borrowing costs. Given the fall in the past few days we except a relief rally in the markets today.”
Foreign funds bought a net $ 2.08 billion of local shares in September, the first monthly net inflow since May, after Reserve Bank of India Governor Raghuram Rajan announced plans to boost the rupee when he took charge on Sept. 4 and the U.S. Federal Reserve decided to maintain economic stimulus. Inflows helped the rupee rebound 10 percent from a record low of 68.845 per dollar on Aug. 28.
International investors have purchased a net $ 13.5 billion of Indian stocks this year, the second-highest among 10 Asian markets tracked by Bloomberg, after Japan.
Indian Oil Corp. (IOCL), the nation’s biggest refiner, may be active after the company said in a statement yesterday that it cut the price of gasoline by 3.05 rupees a liter. It raised diesel prices by 0.50 rupees a liter. Bharat Petroleum Corp. and Hindustan Petroleum Corp. may also move.
The Sensex has lost 0.2 percent this year and is valued at 13.4 times estimated 12-month profits, compared with the five-year average of 14.1 times. The MSCI Emerging Markets Index is trading at 10.4 times.
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