MARKETS LIVE: Sensex, Nifty extend gains as FM presents Budget 2018

Benchmark indices Sensex and Nifty were trading higher as Finance Minister Arun Jaitley tabled the Union Budget 2018 in the Parliament today.

In Budget 2018, the government aims to woo back rural voters and small businesses ahead of state elections.

To keep investors’ confidence, however, Modi’s government will need to be seen containing the fiscal deficit, while also increasing spending in key areas of the slowing economy. Markets will be focused on how much India widens its fiscal deficit beyond the 3% of gross domestic product projected for 2018/19.

But a deficit above 3.2% could hit shares and send bond yields up by 20-25 basis points, depending on the size of the blowout, on fears of populist policy ahead of next year’s elections.

Meanwhile, India’s annual economic growth in the fiscal year that ended in March 2017 was unchanged at 7.1%, a government statement showed on Wednesday.

Globally, Asian shares eked out modest gains on Thursday, clawing back sharp losses from earlier this week, however, rising US bond yields and interest rates could dampen investors’ optimism toward the global economic outlook.business-standard