Indian stock-index futures dropped after the benchmark index capped its longest losing streak in two months yesterday.
SGX CNX Nifty Index futures for October delivery fell 0.8 percent to 6,138.5 at 10:10 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index dropped 0.2 percent to 6,164.35 yesterday. The S&P BSE Sensex declined 0.2 percent, falling for a third day. The Bank of New York Mellon India ADR Index of U.S.-traded shares rose 0.5 percent.
The Sensex sank after briefly surpassing its record closing high yesterday as traders pared positions before derivatives contracts expire on Oct. 31. The Reserve Bank of India may increase its benchmark interest rate by 25 basis points at a policy meeting on Oct. 29 to tackle consumer-price inflation that’s remained at more than 9 percent since March 2012, according to 13 out of 17 economists surveyed by Bloomberg.
“Investors are cautious amid speculation that the central bank may raise interest rates next week,” Kishor Ostwal, managing director at CNI Research Ltd., said yesterday. “Volatility is expected to remain high ahead of the derivatives contract expiry next week.”
The rally in Indian stocks that drove the Sensex toward its record will falter as higher interest rates curb economic growth, John Praveen, chief investment strategist at Prudential International Investments Advisers LLC, which manages about $ 1 trillion in assets globally, said in a interview with Bloomberg TV India.
ICICI Bank Ltd. (ICICIBC), the country’s second-biggest lender by assets, may say today its second-quarter profit increased to 21.4 billion rupees ($ 348 million), according to the median estimate of 43 analysts in a Bloomberg survey.
Net income at cigarette maker ITC Ltd. (ITC) may have increased to 21.2 billion rupees in the quarter, according to the median estimate of 31 analysts surveyed by Bloomberg.
GAIL India Ltd. (GAIL), India’s biggest gas marketing company, may report profit of 9.31 billion rupees, according to a Bloomberg survey of 36 analysts.
Profits at all nine of the 30 Sensex companies that have reported earnings so far for the three months ended Sept. 30 have beaten or matched estimates, compared with 47 percent that missed projections in the previous quarter.
Deutsche Bank boosted its December target for the Sensex to 22,000 from 21,000 in a report dated yesterday, on the prospect excessive investor pessimism may be receding. The bank upgraded Indian (SENSEX) lenders to overweight and cut technology-service stocks to neutral. The average estimate in a Bloomberg survey of 11 forecasters fell to 19,409 this month from 21,150 in July.
Global investors bought a net $ 104.9 million of stocks on Oct. 23, a 14th day of purchases, data from the regulator show. That took this year’s inflows to $ 15.3 billion, the second-highest after Japan among 10 Asian markets tracked by Bloomberg.
Overseas investors have bought $ 1.89 billion of local shares this month, adding to inflows of $ 2 billion in September, data from the market regulator show.
The Sensex has risen 6.9 percent this year and is valued at 14 times estimated 12-month profits, compared with the MSCI Emerging Markets Index’s 10.7 times.
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