Indian stock-index futures advanced and rupee forwards strengthened after the benchmark gauge surged to a record yesterday.

SGX CNX Nifty (NIFTY) Index futures for December delivery climbed 0.4 percent to 6,419.0 at 9.40 a.m. in Singapore. The underlying CNX Nifty Index on the National Stock Exchange of India Ltd. soared 1.7 percent to 6,363.90 yesterday, an all-time closing high. The S&P BSE Sensex (SENSEX) jumped 1.6 percent to 21,326.42 to a record. The Bank of New York Mellon India ADR Index of U.S.- traded shares rose 1.4 percent to 1,170.12. One-month rupee forwards increased 0.3 percent.

Stocks rallied yesterday after the Bharatiya Janata Party won the most seats in four of five local elections held in India over the past month, giving it momentum before a 2014 national poll. The victories, which strengthen the prospects of Narendra Modi as the next prime minister, will boost the benchmark stock index by as much as 6 percent by year-end, according to the average of 10 estimates compiled by Bloomberg last week.

“Foreign investors have been caught off-guard,” Gary Dugan, chief investment officer for Asia and the Middle East at Coutts & Co., said in an interview to Bloomberg TV India yesterday. “I don’t think they have recognized the momentum and therefore you could see a follow-on of wades of foreign capital potentially coming into the markets.”

The state polls are the final test for India’s two major parties before the national vote. Goldman Sachs Group Inc. raised India to market weight from underweight on Nov. 5, saying the state polls may signal an opposition win in the federal vote, helping spur investment.

The Sensex has climbed 9.8 percent this year, the best performer among the four largest emerging markets, and trades at 13.9 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s 10.6 times.

Global investors bought a net $ 210 million of local shares on Dec. 5, taking this year’s inflows to $ 17.9 billion, the most in Asia after Japan, according to data from the market regulator.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at

To contact the editor responsible for this story: Michael Patterson at

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