Indian (SENSEX) stock-index futures jumped as U.S. lawmakers moved toward an agreement to increase the government debt ceiling, and before Infosys Ltd. (INFO) reports quarterly earnings today.
SGX CNX Nifty Index futures for October delivery increased 1.1 percent to 6,140.5 at 10:15 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index rose 0.2 percent to 6,020.95 yesterday. The S&P BSE Sensex advanced 0.1 percent. The Bank of New York Mellon India ADR Index of U.S.-traded shares gained 2.6 percent, capping the biggest two-day rally since May.
Talks between President Barack Obama and Republican lawmakers will continue as they try to seek a “path forward” on the debt ceiling, according to Republican House Majority Leader Eric Cantor. The International Monetary Fund warned this week that failure to reach an agreement “could seriously damage the global economy.” Quarterly profits at Infosys Ltd., India’s second-largest software exporter, may have grown 12 percent from a year earlier, according to a Bloomberg survey.
“All eyes will be on Infosys earnings and how the debt issue pans out in the U.S.,” Kishor Ostwal, managing director at CNI Research Ltd., said in an interview yesterday. “We are expecting a good set of numbers from Infosys given the rupee’s decline in the quarter under review.”
Infosys Reports
Infosys profit may climb to 26.6 billion rupees ($ 433 million) from 23.7 billion rupees a year earlier, according to the median estimate of 41 analysts surveyed by Bloomberg.
The rupee lost 5.2 percent against the dollar in the quarter ended Sept. 30, the third-worst performer after the Indonesian rupiah and Argentinian peso among 24 emerging-market currencies tracked by Bloomberg. Infosys got 64 percent of its revenue from North America in the fiscal year ended March 2013, according to data compiled by Bloomberg.
Profits in dollar-denominated sectors, including software, health care and metals, likely grew 19 percent in the quarter from a year earlier, Motilal Oswal Securities Ltd. wrote in a note dated Oct. 1.
About 47 percent of Sensex companies missed analysts’ profit forecasts in the June quarter, compared with 27 percent three months earlier.
India’s economic growth will accelerate from the previous quarter as exports strengthen, agricultural output improves and the nation tackles challenges such as poor infrastructure and a “distorted” regulatory regime, Reserve Bank of India Governor Raghuram Rajan said in a speech in Washington yesterday.
While inflation remains high, Rajan said, India may be past the slowdown in growth, which cooled to 4.4 percent last quarter from a year earlier, the least since the three months ended March 2009.
Global investors bought a net $ 52.4 million of local stocks on Oct. 9, taking this year’s inflows to $ 13.9 billion, data from the regulator show.
The Sensex has risen 4.4 percent this year and is valued at 13.9 times estimated 12-month profits, compared with the five-year average of 14.1 times. The MSCI Emerging Markets Index is trading at 10.6 times.
To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net
To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net