Indian shares rise ahead of federal budget

Indian shares rose on Tuesday in the run-up to the federal budget where Finance Minister Nirmala Sitharaman is expected to announce plans to revive a pandemic-hit economy by increasing spending on infrastructure and healthcare.

The attempts to raise spending, against the backdrop of mounting government debt and subdued private investments, come as Asia's third largest economy looks to grow 8% to 8.5% in 2022-23 compared to 9.2% in the current fiscal year.

Brokerage Nomura expects a 25% increase in capital expenditure, with higher allocations for roads, highways and railways, as the government is likely to attract investments that create jobs and spur growth.

With an eye on elections in five states, Sitharaman is also likely to set aside about $40 billion on food and fertiliser subsidies and promise higher rural spending, which could support agricultural stocks.

The blue-chip NSE Nifty 50 index rose 0.8% to 17,478.7 by 0346 GMT on Tuesday, while the benchmark S&P BSE Sensex was up 0.9% at 58,537.64.

The Nifty Bank index and the Nifty IT index were the best performers, rising as much as 1.6% each. 

Shipping Corp of India jumped 10.8% after its quarterly profit more than doubled.

Tata Motors fell as much as 3.5% after the automaker reported a bigger quarterly loss than expected.

Shares of refiners were also trading lower after reporting a drop in their profit. Bharat Petroleum Corp was down 3.6% and Hindustan Petroleum Corp 4.8%. 

Top refiner Indian Oil Corp dropped 3.3% as its profit missed market expectations for the December quarter. 

The Nifty ended January slightly lower, while the Sensex shed 0.4%. Heavy foreign investor selling last month on worries over the U.S. Federal Reserve's plan to raise interest rates has erased gains recorded earlier this year and weighed on IT shares.

Investors are also awaiting monthly sales numbers from automakers on Tuesday.

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