India’s Nifty Futures Rally After Indexes Decline for Fifth Day

Indian (SENSEX) stock-index futures rose after benchmark indexes declined for a fifth day yesterday.

SGX CNX Nifty Index futures for December delivery climbed 0.7 percent to 6,224 at 9:42 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index fell 0.2 percent to 6,154.70 yesterday. The S&P BSE Sensex lost 0.3 percent. The Bank of New York Mellon India ADR Index of U.S.-traded shares added 2.2 percent.

The MSCI Asia Pacific Index rallied from a three-month low today after manufacturing accelerated in the U.S. and Europe, and as investors await the outcome of a U.S. Federal Reserve meeting. India’s central bank meets tomorrow to review monetary policy, with the majority of analysts in a Bloomberg survey predicting an increase in borrowing costs.

“The five-day fall is giving some comfort to investors,” Surya Narayan Nayak, head of equity research at Sun Capital Advisory Services Pvt., said by phone from Mumbai today. “Regional peers are gaining today and we can see a rub-off effect.”

The Sensex dropped yesterday after data showed inflation in November was faster than economists estimated. Wholesale prices climbed 7.5 percent, compared with 7 percent predicted by economists in a Bloomberg survey. Consumer prices rose 11.24 percent, compared with a forecast 10 percent increase.

Rate Review

Most economists surveyed by Bloomberg expect RBI Governor Raghuram Rajan to increase the repurchase rate to 8 percent from 7.75 percent tomorrow. Rajan has raised the main interest rate twice to fight rising prices since taking over at the central bank in September.

Global investors bought a net $ 38.7 million of local shares on Dec. 12, taking this year’s inflows to $ 18.7 billion, the most in Asia after Japan, according to data compiled by Bloomberg.

The Sensex has climbed 6.4 percent this year, the best performer among the four largest emerging markets, and trades at 13.4 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s 10.1 times.

The Indian index climbed to a record on Dec. 9 after the Bharatiya Janata Party won state elections, giving it momentum to end the ruling Congress party’s decade-long rule in polls due by May and install Narendra Modi as prime minister.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net

To contact the editor responsible for this story: Richard Frost at rfrost4@bloomberg.net

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