India's stock market will eye reforms to be announced by the Congress-led government in the federal budget next Monday for future trends, dealers said on Friday. Investors will also track first quarter earnings data from Indian firms, for the three months ended June, which starts with software giant Infosys Technologies on July 10.
On Thursday, India's finance ministry presented the Economic Survey that forecast economic growth of more than 7.0 percent this year. The government said the expansion would rely on a recovery in the United States and the global economy as a whole.
India's 1.2 trillion dollar economy expanded 6.7 percent in the year ended March 31, the slowest rate since 2003. The budget is expected to focus on boosting growth - even at the risk of a wider fiscal deficit.
For the week to July 3, the benchmark 30-share Sensex index rose one percent or 148.41 points to 14,913.05. Investors have bet on reforms to help spur investments in the financial and infrastructure sectors. They expect aid for exporters and a further lowering of interest rates.
This week overseas funds bought equities worth 387 million rupees and local institutional funds also bought sporadically, which led to a small recovery. At its recent intra-day peak of 15,600 points, the Sensex was up more than 90 percent from a low of 8,047.17 in early March, before slipping on profit taking.
Foreign funds have bought equities worth 5.19 billion dollars so far this year after selling shares worth 6.25 billion dollars during the same period last year.
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