Indian shares rise ahead of federal budget

Bengaluru - The NSE Nifty 50 index rose 0.83 per cent or 112.50 points to 13,747.10, while the benchmark S&P BSE Sensex was up 1.22 per cent or 565.03 points at 46,850.80.

Dubai — Indian shares rose on Monday ahead of the federal budget where Finance Minister Nirmala Sitharaman is expected to unveil several measures to bolster the economy following the impact of the Covid-19 pandemic.

The ruling party of Asia’s third-largest economy has promised a game-changing budget to revive the virus-hit economy, with Sitharaman likely to increase spending by more than 15 per cent in 2021-22, with an emphasis on infrastructure and healthcare, although the nation carries a mountain of debt.

There are also expectations that India will unveil some tax relief measures for pandemic-hit sectors such as real estate, aviation, tourism and automakers.

The NSE Nifty 50 index rose 0.83 per cent or 112.50 points to 13,747.10, while the benchmark S&P BSE Sensex was up 1.22 per cent or 565.03 points at 46,850.80.

Vijay Valecha, chief investment officer, Century Financial, said: “Indian stocks are expecting a major boost today as the Union budget comes out. The expectations from the FM (Finance Minister) majorly are the disinvestment of government entities, increase in government spending, deductions on medical insurance, clarity of digital tax and increase in tax brackets. The worst hit sectors during 2020 such as Real Estate, Banking, Automobiles and Railways are expecting a handsome stimulus package from the government this year.”

The markets have opened positive after a turmoil in the previous week, Nifty up 100 plus points at 13,750 and the Sensex is up 450 points towards 46,750. The expectations that the market has built around this budget is very optimistic and positive. Upside on the markets can be expected to be more than 2 per cent on the benchmark indices today, as the budget unfolds.

The blue-chip stock indexes rocketed to record highs earlier in 2021 as India started a huge vaccination drive and as corporates reported encouraging earnings, but in the days leading up to the budget they have fallen for six straight sessions up to Friday.

The indexes recovered from a pandemic-induced plunge in March last year to finish 2020 around 15 per cent firmer, their best performance since 2017, fuelled by strong foreign inflows amid massive liquidity in global markets and vaccine hopes.