Indian shares shaky before budget as virus scare roils global markets

Sadbhav Engineering

01/02/2020 04:30

By Chris Thomas
    Feb 1 (Reuters) - Indian shares got off to a choppy start in
a special trading session on Saturday ahead of the annual budget
when Finance Minister Nirmala Sitharaman is expected to unveil a
raft of measures to revive a sagging economy.
    In early trade shares slipped in reaction to an overnight
shakeout in global markets on growing concerns about the
economic impact of the coronavirus outbreak in China, but focus
is set to shift to the domestic budget.  MKTS/GLOB 
    "We opened negative in the aftermath of the correction in
the U.S. market due to concerns over the China virus," said A.K
Prabhakar, head of research at IDBI Capital.
    "But from here on, the domestic market might recover ahead
of the budget since we have seen significant correction over the
past few days and on good results from SBI and Hindustan
Unilever."
    With growth in Asia's third-largest economy languishing at
its lowest in a decade, the government is likely to increase
spending on infrastructure and offer some tax incentives in its
2020/2021 budget.  urn:newsml:reuters.com:*:nL4N2A02A6
    The government estimates that economic growth in the year
ending March 31 will slip to 5%, the weakest pace since the
global financial crisis of 2008-09. Growth is expected to
recover to 6%-6.5% in the following year.
    The NSE Nifty 50 index  .NSEI  and the benchmark S&P BSE
Sensex  .BSESN  were trading largely flat by 0426 GMT after
falling as much as 0.7% each in early trade.
    Mid-cap and small-cap shares, which were under pressure last
year, have outperformed bluechip stocks in January in the run up
to the budget.
    The Nifty 50 fell 1.7% in January, while the Sensex slipped
1.3%. However, the Nifty Midcap 50 Index  .NIMDCP50  climbed
4.6%.
    The bluechip indexes have rallied over 12% last year, riding
on a large corporate tax cut from the government in September
aimed at boosting the economy. The rupee  INR=D4  was 2.3%
weaker in 2019.     
    Shares of roadbuilders Sadbhav Engineering Ltd  SADE.NS  and
IRB Infrastructure Developers Ltd  IRBI.NS  surged 20-43% in
January as investors bet on increased spending by the government
in infrastructure.
    Financial stocks were the biggest drag on Saturday, with
private sector lenders HDFC Bank Ltd  HDBK.NS  and Kotak
Mahindra Bank Ltd  KTKM.NS  slipping around 2% each.
    Power Grid Corporation of India Ltd  PGRD.NS  was the
biggest loser on the Nifty 50, falling as much as 5.3% to a near
one-year low. 
    Consumer products giant Hindustan Unilever Ltd  HLL.NS 
topped gains with a 2.6% jump after posting a rise in quarterly
profit on Friday.

 (Reporting by Chris Thomas in Bengaluru
Editing by Shri Navaratnam)
 ((chris.thomas@thomsonreuters.com; +91-80-6749-8695))