India's 2017 budget buoys Sensex
The benchmark Sensex regained the 28,000-mark. Photograph: (AFP)
Indian shares rose more than 1.5 per cent on Wednesday (February 01) after Finance Minister Arun Jaitley unveiled a budget with a range of incentives for companies and geared towards boosting infrastructure and developing the rural economy.
The benchmark Sensex closed at 28,141.64, recording a jump of 1.76 per cent from the previous close.
Nifty jumped to 8,716.40 and was up 1.81 percent.
A Mumbai-based market expert, Sunil Shah, described the budget as growth-oriented.
"This budget is perceived to be growth-oriented with fiscal prudence in place and no negative and that is the reason market is rejoicing and you have seen, market is just close and the closing number is, Sensex is up by 485. So I think market has given thumbs-up to the Finance Minister's Budget," said Shah.
Finance Minister Arun Jaitley announced increases in spending on rural areas, infrastructure and fighting poverty.
"It seems that budget is pro-poor, pro-farmer, pro-rural and giving a much necessary thrust to the infrastructure sector and housing sector. Now, this will give necessary impetus for the overall GDP growth, because when you spend a lot of money on infrastructure, it will trickle down to the other sectors of the economy," Shah added.
However, views on the fiscal deficit target were mixed after the government raised it to 3.2 per cent from its earlier forecast of 3 per cent, with some analysts expressing scepticism about whether it would be achievable.
Bonds were down with the benchmark 10-year bond yields up 1 basis point at 6.42 per cent after rising as much as 5 bps earlier amid confusion about the government's planned gross borrowing numbers.
The numbers initially provided by the government did not account for a buyback of a net 750 billion rupees in bonds, which is part of the 6.05 trillion rupees gross borrowing projection for the next fiscal year and 3.48 trillion rupees net borrowing projection.
The rupee strengthened to 67.59 per dollar from its previous close of 67.86.