Indian stock-index futures gained as Prime Minister Narendra Modi and President Barack Obama reached an agreement that could spur nuclear energy projects, and the U.S. leader pledged initiatives to generate more than $ 4 billion of trade and investment between the two countries.
SGX CNX Nifty Index futures for January delivery rose 0.4 percent to 8,852 at 9:57 a.m. in Singapore. The underlying CNX Nifty Index (NIFTY) rallied 0.9 percent to a record 8,835.60 on Jan. 23. The S&P BSE Sensex (SENSEX) also advanced 0.9 percent to an all-time high. Markets in India were closed yesterday for a holiday. The Bank of New York Mellon India ADR Index of U.S.-traded shares climbed for a seventh day yesterday, adding 1 percent.
Obama and Modi said they will streamline regulations that make it difficult for U.S. companies to do business in India. The two leaders said they had made a breakthrough meant to spur a surge in civilian nuclear projects, while Modi also won backing from the U.S. for a $ 160 billion solar energy program in a nation where 400 million people lack access to electricity.
“Obama’s visit is a sign of India’s increasing influence and importance on the world stage,” Adrian Lim, a Singapore-based money manager at Aberdeen Asset Management Plc, wrote in an e-mailed statement. “Since Modi’s landslide victory, the improvements made by the government have added to the perception that India is the next untapped market for U.S. companies.”
Shares of Larsen & Toubro Ltd. (LT), India’s largest engineering company, may be active today. The nuclear deal between India and the U.S. opens up “large potential,” M.V. Kotwal, the company’s president for heavy engineering, said in a statement on Jan. 25.
Maruti Suzuki India Ltd. (MSIL), the nation’s biggest carmaker, may report today that third-quarter profit rose 31 percent to 8.93 billion rupees ($ 145.4 million), according to the median estimate of 36 analysts in a Bloomberg survey.
Titan Co. Ltd. (TTAN), the jewelry retailer controlled by the Tata Group, may report quarterly net income rose 16 percent to 1.93 billion rupees, according to the median forecast of 21 analysts surveyed by Bloomberg.
The Sensex rallied 4.1 percent last week, the most since the five days ended June 6. International investors bought a net $ 107.2 million of Indian stocks on Jan. 22, extending this year’s inflow to $ 889.7 million, the second-highest among eight Asian markets tracked by Bloomberg, after Taiwan.
Still, the options market is signaling greater odds of a selloff in stocks after the Nifty’s valuation climbed to a four-year high and its relative strength index increased to levels that signal gains may be overdone. Next month’s budget may be the trigger for losses, according to Kotak Securities Ltd.
The Nifty’s 50-day historical volatility index, which measures price swings, rose to the highest level since December 2013 last week.
The Sensex has gained 6.5 percent this year and is valued at 16.3 times projected 12-month earnings, the most expensive in four years. That compares with the MSCI Emerging Markets Index’s multiple of 11.6.
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