Indian shares inched higher in a special session for the union budget on Saturday, with investors watching for consumption-boosting measures amid an economic slowdown due to high inflation and anemic wage growth.
The Nifty 50 was 0.23% higher at 23,561.5 points, as of 9:38 a.m. IST, while the BSE Sensex gained 0.28% to 77,715.96.
India’s debt and forex markets will remain closed.
Finance Minister Nirmala Sitharaman will present the budget in parliament from 11 a.m. IST.
Twelve of the 13 major sectors advanced, while the more domestically focussed mid-cap and small-cap indexes rose 0.7% and 1%, respectively.
The realty index climbed 1% amid expectations of measures boosting housing and infrastructure segments. Including the day’s move, the index has gained 10% in five sessions.
India’s Nifty posts longest monthly losing run in 23 years; all eyes on budget
State-owned companies also gained 1%, buoyed by expectations of increased budgetary allocations.
The Nifty has lost 4% since the post-elections budget on July 23, while the mid-cap and the small-cap indexes have shed 4.6% and 8.1% due to a slowdown in the world’s fifth-largest economy that has eaten into corporate earnings and driven away foreign investors.
“The union budget is expected to take a pragmatic approach, balancing growth aspirations with fiscal discipline,” said Pranav Haridasan, managing director and chief executive at Axis Securities.
Economic growth is expected to be 6.3%-6.8% in the fiscal year starting April, a range that straddles the 6.4% GDP growth projected for this fiscal year, the annual Economic Survey showed on Friday.
The government is expected to use the budget to stimulate growth, although analysts do not expect more capital spending to be one of the levers.
“Unhinged capital expenditure is unlikely given how important balancing the fiscal situation is, despite the focus firmly on boosting economic growth,” Haridasan said.
American Dollar Exchange Rate