Markets weekahead - Stakes high as India gears up for budget

Sat Feb 23, 2013 5:03am IST

A view of the parliament building is seen on the opening day of the monsoon session in New Delhi August 1, 2011. REUTERS/B Mathur/Files

A view of the parliament building is seen on the opening day of the monsoon session in New Delhi August 1, 2011.

Credit: Reuters/B Mathur/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.

(Reporting by Swati Bhat)

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

REUTERS SHOWCASE

TCS Results

TCS Results

TCS net profit rises 51.5 percent, sees stronger sales growth.  Full Article | Quote 

Google Results

Google Results

Google Q1 revenue misses Wall Street targets.  Full Article 

Ambitious Aim

Ambitious Aim

In green car race, Toyota adds muscle with fuel-cell launch.  Full Article 

Sparking Boom

Sparking Boom

BlackBerry: the crash that launched 1,000 start-ups.  Video 

Telecom Sector

Telecom Sector

RComm to raise mobile call tariff by up to 20 percent  Full Article 

Chinese Economy

Chinese Economy

China economic growth slows to 18-month low in first quarter  Full Article 

Breakingviews

Breakingviews

Diageo throws money at Indian empire-building  Full Article 

Reuters India Mobile

Reuters India Mobile

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