India’s stock-index futures dropped as investors assessed Prime Minister Narendra Modi’s plan for financial reforms.
SGX CNX Nifty Index futures for August delivery fell 0.2 percent to 7,783.5 at 11 a.m. in Singapore. The underlying CNX Nifty Index (NIFTY) on the National Stock Exchange of India Ltd. gained 0.7 percent to 7,791.70 on Aug. 14, a day before markets closed for Independence Day holiday. The S&P BSE Sensex (SENSEX) rose 0.7 percent to 26,103.23 before Modi’s speech. The Bank of New York Mellon India ADR Index of U.S.-traded shares slipped 0.1 percent on Aug. 15.
Modi pledged in his Independence Day speech to provide bank accounts and life insurance for millions of poor people while seeking to revive manufacturing in Asia’s third largest economy. The announcements came after lawmakers blocked a bill proposing a higher foreign ownership cap in the insurance sector, raising concerns that Modi will struggle to pass laws.
“I do hope announcements will quickly follow” to execute the ideas mentioned by Modi in his speech, A.S. Thiyaga Rajan, a senior managing director at Aquarius Investment, said in an e-mail. “Implementation, implementation and implementation is the key which everyone is looking for.”
International investors have poured $ 12.3 billion into local equities this year, the most in Asia, on expectations Modi’s administration will introduce policies to spur an economy growing at near the slowest pace in a decade.
The Sensex trades at 15.3 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s multiple of 11.2. The Sensex has surged 23 percent this year and is the best performer among the world’s 10 biggest markets.
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