Sensex ticks up on hopes of tax boost in budget

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Jul
4

BENGALURU (Reuters) – Indian shares edged up tracking gains in broader Asia on Thursday buoyed by hopes of a possible rate cut by the U.S. Federal Reserve, a day ahead of the Union Budget which is expected to cut taxes on business and raise spending in an effort to breathe some life into a stagnating economy.

The broader Nifty was up 0.28% at 11,949.20, while the Sensex was up 0.26% at 39,948.66 as of 0934 IST.

Asian markets were up mirroring gains seen on Wall Street, as data hinting at a slowdown in economic growth in the United States fuelled hopes of a possible rate cut by the U.S. Federal Reserve. The MSCI’s broadest index of Asia-Pacific shares outside Japan ticked up 0.3%.

The U.S. central bank last month signaled it could ease monetary policy as early as its July 30-31 meeting, citing rising risks to the economy from the trade war between Washington and Beijing, and low inflation.

In India, the Narendra Modi government will unveil its first budget since winning a second term by a landslide in May. Finance Minister Nirmala Sitharaman has to battle slumping economic growth and high rates of unemployment.

Economists expect her to take measures to boost domestic growth and rural consumption, among other things.

The Nifty PSU bank index, which tracks India’s state-owned lenders, was up as much as 1.8%.

Indiabulls Housing Finance Ltd and Yes Bank Ltd were among the top gainers on the NSE index. Shares of Indiabulls Finance climbed as much as 4% and was on track for their fourth straight day of gains while Yes Bank shares were up as much as 2.4%

Meanwhile, The Nifty IT index was trading down as much as 0.2%. HCL Technologies was down as much as 1.3% while shares of Mindtree Ltd were down as much as 1.7%.

On Wednesday, conglomerate Larsen Toubro Ltd bought a 60.06% stake in Mindtree.

Reporting by Chandini Monnappa in Bengaluru; Editing by Rashmi Aich

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