February 5, 2020 / 4:57 AM / in 17 days

Indian shares track broader Asia higher; cenbank's policy outcome awaited

BENGALURU, Feb 5 (Reuters) - Indian shares were higher on Wednesday, as broader Asian shares rose on hopes of further stimulus from China to stem the impact of the coronavirus outbreak, while domestic investors awaited the central bank’s policy decision on Thursday.

The broader NSE Nifty 50 index was 0.45% higher at 12,034.55 by 0409 GMT and the benchmark S&P BSE Sensex rose 0.42% to 40,961.31.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.36%, amid a Reuters report that the People’s Bank of China is likely to lower its key lending rate, the loan prime rate, on Feb. 20, and cut banks’ reserve requirement ratios in the coming weeks.

The setup is good for Indian markets since global markets are rising and crude prices have been falling, said Neeraj Dewan, director at Quantum Securities.

China providing an incentive to its markets was also a positive, he added.

Meanwhile, investors awaited the Reserve Bank of India’s (RBI) policy outcome on Thursday, where it is widely expected that rising inflation will keep the central bank from cutting interest rates.

The RBI’s policy decision comes days after the country’s federal budget failed to inspire confidence among investors, who were hoping for lower taxes on long-term capital gains and much needed stimulus to revive growth in Asia’s third-largest economy.

The central bank may neither cut nor raise interest rates, said Madhumita Ghosh, dean at Tasmac Global Securities, adding that the stance was also likely to remain ‘accommodative’.

Autos led gains in the domestic market. The Nifty auto index rose 1.1% led by heavyweight Tata Motors Ltd , which advanced 3.17%.

Bharti Infratel Ltd and Bharat Petroleum Corp Ltd were the other top gainers on the Nifty, rising 3.2% and 2.6%, respectively.

Zee Entertainment Enterprises Ltd was the biggest loser on the Nifty, dropping 1.72%. (Reporting by Derek Francis in Bengaluru; Editing by Shounak Dasgupta)

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