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Sensex climbs ahead of interim budget

February 13, 2009

Hope and optimism ahead of Monday’s interim budget saw the Sensex end the last trading day of the week 1.8 percent higher.

The coalition government, which faces general elections by May, is likely to focus on measures to shore up the flagging economy and stem job losses in the interim budget.

The proposal to cuts most passenger fares, as announced in the interim rail budget today, also helped boost investor sentiments.

Energy, financial stocks and engineering firms rose as investors built position ahead of Monday’s budget announcement.

Financial stocks led by SBI and ICICI Bank rose on hopes of a rate cut, while engineering firms like L&T and BHEL gained on expectations of higher spending on infrastructure.

Gains were led by Reliance Industries which rose 2.9 percent.

SBI and ICICI Bank were up 3 percent each, while HDFC Bank added 1.5 percent.

The benchmark index ended 168.9 points up at 9634.74, having risen as much as 2.4 percent during trade. It was the second weekly gain in six.

L&T added 2.8 percent, BHEL rose 3.4 percent and NTPC gained 1.6 percent.

Today, the government said it would continue to stimulate domestic demand and inject liquidity into the system – something that investors look forward to hearing to help bringing confidence back. Investors are also hopeful that sluggish economic growth and a drop in the inflation rate to its lowest in a year at 4.39 percent at the end of January will bring about another round of rate cuts.

Will a favorable budget announcement help bring confidence back into the market?

Comments

I expect a good budget, especially because the govt is about to leave, and am quite optimistic that markets will rally. I have a Sensex target of over 10,000 in the near term.

Posted by Raju Srinath | Report as abusive
 

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