Mumbai: India’s futures rose for a third day on the Singapore Exchange on Monday after the South Asian nation cut interest rates and unveiled a stimulus package to revive an economy growing at its slowest pace in six years.
The central bank slashed interest rates for the fourth time in less than three months. India also unveiled a second stimulus package to counter the effect of the global slump.
“The rate cuts were sharper than we had expected,” said Kenneth Andrade, head of investments at IDFC Asset Management Co. and oversees assets worth $1.8 billion (Rs8,712 crore). “The move is positive for capital markets.”
S&P CNX Nifty Index futures for January delivery closed at 3,134, up 71 points, in Singapore on Monday.
The contract, which is derived from the 50 stocks on the underlying S&P CNX Nifty Index on the National Stock Exchange of India, climbed 0.3% to 3,053.60 in Mumbai on 2 January.
The Bombay Stock Exchange’s (BSE) Sensex index added 54.76 points, or 0.6%, to 9,958.22 on 2 January. The benchmark index gained 6.8% last week. The Nifty added 0.4% to 3,046.75. The BSE 200 Index advanced 0.8% to 1,197.04.
The Reserve Bank of India on 2 January lowered the repurchase rate by 1 percentage point to 5.5% and the reverse-repurchase rate by the same margin to 4%. The government also more than doubled the amount overseas investors can hold in local bonds and extended capital to the nation’s banks.
State governments will be allowed to raise an additional Rs30,000 crore in the year to 31 March to build roads, schools and hospitals.
The government will give Rs20,000 crore to boost the capital of state-run banks and provide Rs25,000 crore for non-bank finance companies.