Indian (SENSEX) stock-index futures climbed before the central bank meets today to set monetary policy.
SGX CNX Nifty Index futures for December delivery rose 0.2 percent to 6,165.5 at 9:52 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index fell 0.3 percent to 6,139.05 yesterday, a sixth day of losses. The S&P BSE Sensex index declined 0.2 percent to the lowest level since Nov. 28. The Bank of New York Mellon India ADR Index of U.S.-traded shares lost 1 percent.
The Reserve Bank of India may raise its benchmark repurchase rate to 8 percent today to rein in consumer prices that accelerated 11.24 percent last month, the most in at least two years. The MSCI Asia Pacific Index gained for a second day as investors await a Federal Reserve decision on its monthly stimulus program.
“The RBI policy and the Fed meeting will decide the course of the market in the short term,” Kishor Ostwal, managing director at CNI Research Ltd., said by phone yesterday. “A 25 basis-point increase by the RBI is priced in. The uncertainty remains over the Fed. Until then it will be wait-and-watch.”
The Fed began a two-day meeting yesterday, at which 34 percent of economists surveyed on Dec. 6 predict it will announce a cut in its $ 85 billion of monthly bond purchases. Forty percent of economists predict the authority will start trimming stimulus in March, while 26 percent see it happening in January.
RBI Governor Raghuram Rajan has raised the main interest rate twice since he moved to the central bank in September to fight inflation.
Wholesale prices climbed 7.5 percent in November, compared with 7 percent predicted by economists in a Bloomberg survey, official data showed Dec. 16.
‘We are very uncomfortable with the current level of inflation,’’ Rajan told reporters in Kolkata on Dec. 12. “We are aware of the weak economy, but we also have to take into account inflationary pressures.”
Global investors sold a net $ 38.2 million of local shares on Dec. 16, paring this year’s inflows to $ 18.7 billion, the most in Asia after Japan, data compiled by Bloomberg show.
The Sensex has climbed 6.1 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 10.4 times.
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