July 5, 2019 / 3:57 AM / 9 months ago

Indian shares rise in early trade as countdown to budget begins

* NSE up 0.26%, BSE index 0.29% higher

* All eyes on budget

* Indiabulls Housing Finance top gainer on NSE

By Chandini Monnappa and Arnab Paul

July 5 (Reuters) - Indian stock markets opened up on Friday, with investors awaiting details from the federal budget due later in the day, as Prime Minister Modi’s government struggles with a sluggish economy and high rates of unemployment.

Finance Minister Nirmala Sitharaman is scheduled to present the new government’s first budget since winning a second term at 0530 GMT. She is expected to boost spending while allowing for the fiscal deficit target to rise.

The broader NSE index was up 0.26% at 11,976 as of 0350 GMT, while the benchmark BSE index was trading 0.29% higher at 40,025.85.

The 10-year benchmark government bond yield was at 6.8914%, compared to its last close of 6.8891%.

The rupee weakened to 68.6075 from its 68.52 close on Thursday.

The government on Thursday forecast that economic growth could get back up to 7% this year, but cautioned it will face challenges .

“Market reaction to the Union Budget could result in volatile move across the board,” said Jayant Manglik, president - retail distribution at Religare Broking Ltd.

“Since Nifty is trading closer to its crucial hurdle of 12,000, we suggest keeping extra caution in long trades. In case of decline, 11,800 would act as strong cushion.”

Meanwhile, broader Asian markets kept their gains on hopes of a possible rate cut by the U.S. Federal Reserve also supported domestic sentiment, and pending news on employment data from the United States.

The MSCI’s broadest index of Asia-Pacific shares outside Japan inching higher to levels not seen since early May.

Back in India, Indiabulls Housing Finance Ltd and Indusind Bank Ltd were the top gainers on the NSE index in early trade. Indiabulls rose as much as 1.6%, while Indusind shares were up 1%.

The country’s IT index was up 0.2%, with shares of Tata Consultancy Services Ltd rising as much as 0.33%. The IT services firm is due to post first quarter results next week. (Reporting by Chandini Monnappa in Bengaluru; Editing by Rashmi Aich)

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