Sensex, Nifty shaky ahead of Budget
Indian shares got off to a choppy start in a special trading session on Saturday ahead of the annual Budget withfinance minister Nirmala Sitharaman expected to unveil a raft of measures to revive a sagging economy.
In early trade shares slipped in reaction to an overnight shakeout in global markets on growing concerns about the economic impact of the coronavirus outbreak in China, but the focus is set to shift to the domestic Budget.
"We opened negative in the aftermath of the correction in the USmarket due to concerns over the China virus," said A.K Prabhakar, head of research at IDBI Capital.
"But from here on, the domestic market might recover ahead of the budget since we have seen significant correction over the past few days and on good results from SBI and Hindustan Unilever."
With growth in Asia's third-largest economy languishing at its lowest in a decade, the government is likely to increase spending on infrastructure and offer some tax incentives in its 2020-2021 Budget.
The government estimates that economic growth in the year ending March 31 will slip to 5 per cent, the weakest pace since the global financial crisis of 2008-09. Growth is expected to recover to 6 per cent-6.5per centin the following year.
The Nifty and the benchmark Sensex were trading largely flat by 0426 GMT after falling as much as 0.7per centeach in early trade.
Mid-cap and small-cap shares, which were under pressure last year, have outperformed bluechip stocks in January in the run-up to the budget.
The Nifty 50 fell to 1.7per centin January, while the Sensex slipped 1.3 per cent. However, the Nifty Midcap 50 Index climbed 4.6 per cent.
The blue-chip indexes have rallied over 12 per centlast year, riding on a large corporate tax cut from the government in September aimed at boosting the economy. The rupee was 2.3per centweaker in 2019.
Shares of roadbuilders Sadbhav Engineering Ltd and IRB Infrastructure Developers Ltd surged 20-43per centin January as investors bet on increased spending by the government in infrastructure.
Financial stocks were the biggest drag on Saturday, with private sector lenders HDFC Bank Ltd and Kotak Mahindra Bank Ltd slipping around 2 per centeach.
Power Grid Corporation ofIndiaLtd was the biggest loser on the Nifty 50, falling as much as 5.3per centto a near one-year low.
Consumer products giant Hindustan Unilever Ltd topped gains with a 2.6per centjump after posting a rise in quarterly profit on Friday.