BLBG:India’s Nifty Stock Futures Drop On Goldman Forecast Cut
Most Indian stocks climbed ahead of the monetary policy decisions by the U.S. Federal Reserve and European Central Bank.
The BSE India Sensitive Index (SENSEX), or Sensex, rose 0.1 percent to 17,257.38 at the close, as 16 stocks climbed and 14 fell on the gauge. Drugmaker Cipla Ltd. (CIPLA) surged the most in more than eight months after its profit exceeded estimates. State Bank of India Ltd. and Housing Development Finance Corp. (HDFC) climbed more than 1 percent each.
The U.S. Federal Reserve will probably forgo announcing a third round of large-scale asset purchases and is more likely to wait until September to unveil plans to buy debt, economists said before today’s meeting. The European Central Bank will announce a decision tomorrow after ECB President Mario Draghi vowed last week to do whatever it takes to preserve the euro.
“The ECB having raised the expectations got to come up with something substantive this week and it would be enough to encourage the risk on trade for a while,” Geoff Lewis, head of investment services at JPMorgan Asset Management in Hong Kong, said on Bloomberg UTV today.
The Sensex has gained 12 percent this year, boosted by record purchases by overseas investors. India’s economy will expand 5.7 percent in the year ending March 31, less than a previous forecast of 6.6 percent, Goldman Sachs Group Inc. (GS) wrote in a report today, citing the outlook for weaker farm output from deficient monsoon rains.
“In spite of macro uncertainties the markets have held up pretty well,” Lewis said. “I can’t see any reasons for a strong catalyst immediately, but on the other hand a lot of bad news is being discounted.”
Foreign funds bought a net $1.8 billion of stocks in July, taking their investment this year in Indian equities to $11.1 billion, data from the market regulator show. That’s a record for the period and the most in Asia this year.
To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net
