Markets weekahead - Stakes high as India gears up for budget

Sat Feb 23, 2013 1:50am IST

An investor scratches his head as he looks at a display of stock prices outside the Bombay Stock Exchange (BSE) building in Mumbai June 18, 2012. REUTERS/Vivek Prakash/Files

An investor scratches his head as he looks at a display of stock prices outside the Bombay Stock Exchange (BSE) building in Mumbai June 18, 2012.

Credit: Reuters/Vivek Prakash/Files

Related Topics

Market Eye Weekahead - India's bond and forex markets are gearing up for one of the key annual domestic events: the budget for the next fiscal year starting in April, to be announced on February 28.

Investors will closely scrutinise the budget to see whether India delivers a credible plan that can contain the fiscal deficit at a targeted 4.8 percent of GDP for 2013/14.

Much is at stake in the budget, given the threat of India losing its investment-grade rating from Fitch and Standard & Poor's.

Whether the government can avoid its usual habit of ramping up spending ahead of general elections, due by 2014, will be particularly key.

Bond investors will check whether India can hold gross market borrowing at 5.7 trillion to 6 trillion rupees, which will be a key indication of the government's fiscal discipline.

The 10-year benchmark bond yield is expected to hold in a 7.75 to 7.83 percent range until the budget, with the yield likely to drop below 7.75 percent if the gross borrowing number is lower than 5.7 trillion rupees.

Forex traders would look for cues on how the government plans to revive investment in key sectors which will be crucial in bringing in dollar inflows and boosting the rupee.

The rupee is seen holding in a 54.10 to 54.80 per dollar range until the budget.

(swati.bhat@thomsonreuters.com/; swati.bhat.thomsonreuters.com@reuters.net)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Shares Hit Record

Sensex, Nifty rise to second consecutive record high

Sensex surges 500 points on BOJ easing, L&T gains

The BSE Sensex and Nifty surged to record highs for a second consecutive session on Friday after Bank of Japan's surprise expansion of its massive stimulus programme raised hopes for additional foreign inflows, boosting blue-chips such as Larsen & Toubro.  Full Article 

REUTERS SHOWCASE

Wilful Negligence?

Wilful Negligence?

SEBI piles pressure on Sahara to sell overseas hotels  Full Article 

Indian Economy

Indian Economy

India's fiscal deficit in H1 almost 83 pct of full-year target.  Full Article 

M&M Earnings

M&M Earnings

M&M Q2 net profit down 4 percent, hit by poor monsoon.  Full Article 

Ban on E-Cigs?

Ban on E-Cigs?

Govt considers ban on e-cigarettes, sale of single smokes.  Full Article 

Commodities

Commodities

Silver futures in India hit four-year low on global cues.  Full Article 

BOJ Policy

BOJ Policy

BOJ shocks markets with surprise easing as inflation slows.  Full Article 

Shadow Banking

Shadow Banking

China's shadow banking sector growing rapidly, third largest in world - FSB.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage