BackSensex up 100 points as fiscal deficit numbers broadly in line with expectation
Fall in crude oil also boosted sentiment
PremiumIndian equity markets on Monday opened marginally higher after the government announced fiscal deficit targets that were largely in line with estimates. Fall in crude oil prices also improved sentiment.
At 9.30am, the benchmark Sensex was 0.26% higher or 105.28 points to 39840.81, while Nifty gained 0.03% or 3.55 points to 11665.40 points.
The government's fiscal deficit numbers for the current year and the next were in line with market expectations at 3.8% and 3.5% of Gross Domestic Product (GDP), respectively.
Investors will now focus on Reserve Bank of India's bi-monthly policy on 6 February. RBI has cut interest rates five times last year, and with inflation exceeding 7%, well above the central bank's target, there may be limited scope to ease more.
Asian Paints rose the most among Sensex stocks, gaining 2.5%.
Shares of ITC fell 3% after the government proposed an increase in excise duty on tobacco.
"The market’s focus should revert to fundamentals, viz. corporate earnings growth, global cues around the spread of Corona Virus and its potential impact on global growth," said Motilal Oswal in a note to its investors.
"Given the absence of sharp growth revival, we expect the market to stay narrow – select sectors with better earnings visibility will continue enjoying valuation premium over the broader markets," Motilal Oswal added.
Global markets brace for the most tepid week of the year as Chinese markets, which opened after an extended Lunar New Year break, cracked 9%. To avoid any panic, the Chinese central bank announced infusion of US$ 170 billion into banks to ensure stability. Beijing also said it would help firms that produce vital goods resume work as soon as possible.
A total of 361 people have died in China from the novel coronavirus, with the first death out of the mainland reported in the Philippines on Sunday.
Japan's Nikkei tumbled 1% and Australia's benchmark index ASX was down 1.2%.
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