Sensex, Nifty cautious ahead of Budget as markets watch out for populist measures

Indian benchmark indices opened on a cautious note ahead of the Union Budget 2016-17 due later today, waiting to watch the proposals which would set the course of the markets in the coming days.

BSE Sensex was trading up 0.12% at 27,689.77 points, and NSE Nifty was up 0.16% at 8,575 points, with most sectoral indices recording mild gains.

The indices fell yesterday after rising by as much as 3.5% in the previous week on profit booking and concerns that the rally could not be sustained ahead of the Budget, as is seen in the past.

Infrastructure and social sector stocks will be most watched, as the government is expected to boost spending on these to ease the pain of demonetisation. A possible boost to the rural income and job creation may push up the automobile stocks, particularly that of two-wheeler makers.

Concerns that Finance Minister Arun Jaitley would be more populist in this Budget may keep the indices range-bound, as the government largesse on populist measures may stretch its fiscal deficit.

Bombay Stock Exchange - BSE

National Stock Exchange of India Ltd (NSE)