Ingenious, Sensex increases as banks win, all eyes on the budget

NEW DELIH: Indian stocks rose on Friday, led by gains in bank shares, a day before the long-awaited announcement that occurs during the country's worst economic slowdown in a decade.

World markets have had a turbulent week when investors worried about the economic impact of the outbreak in China, which has so far killed 213, which on Thursday caused the World Health Organization to declare a global health emergency.

Still, Asian markets rose on Friday when investors held on to hopes that China could contain the virus.

The NSE Nifty 50 index rose 0.21% to 12,061.60 for 0410 GMT, while the S&P BSE Sensex had increased 0.30% to 41,035.80.

Indian markets have also been volatile before the announcement of the federal budget on Saturday.

Prime Minister Narendra Modi's government is expected to increase infrastructure spending and reduce some personal taxes in its 2020/2021 budget, to stimulate consumer demand and investment, government sources and economists said.

Much of the expectations around the budget have been taken into account in stock prices and investors will wait until the announcement before placing large bets, said Vinod Nair, head of research at Geojit Financial Services in Kochi.

Growth is on the agenda. People want tax cuts, more incentives for industries and stock markets, Nair said about budget expectations.

Shares in Kotak Mahindra Bank, one of the largest private sector lenders in India, were at the top of the Nifty 50 with a 5% increase after receiving approval from the central bank to limit the voting rights of its 20% promoter until the end of March.

Around 23 of the 29 Nifty 50 profit points on Friday come from Kotak, which makes it the biggest boost for the index.

The Nifty bank index rose 1%, with only one of its 12 components in red.

The Blue-chip Nifty 50 has fallen slightly so far in 2020, and has fallen 1.2% from its record intraday high of January 20, amid financial results poorly received from the heavyweights of the index and Concerns about the spread of coronavirus in China.

But the small and medium capitalization shares of India, lagging behind in recent years, have enjoyed a steady rebound since the beginning of the year. The S&P BSE small-cap index has risen 8% so far this year, while the S&P BSE has advanced 4%.