Indian shares rise ahead of federal budget

BENGALURU: 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% 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 0.78% to 13,741 by 0346 GMT, while the benchmark S&P BSE Sensex was up 0.84% at 46,673.82.

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% firmer, their best performance since 2017, fuelled by strong foreign inflows amid massive liquidity in global markets and vaccine hopes.

While India did not roll out stimulus packages on a scale comparable to its western counterparts, it has managed to pull ahead as daily virus cases declined sharply from September and several businesses returned to normalcy.

India's economy is seen clocking robust growth of 11% for the coming fiscal year, after likely contracting 7.7% in the current fiscal year to March 31, an annual economic survey showed on Friday.