BNP Paribas’ Freris Says Market ‘Relieved’ After Indian Budget
The Bombay Stock Exchange’s Sensitive Index, or Sensex, climbed 2.5 percent to 18,149.48 as of 2:07 p.m. in Mumbai today, on course for its biggest gain in two weeks. India will cut the budget deficit to 4.6 percent of its gross domestic product in the fiscal year ending in March 2012, Finance Minister Pranab Mukherjee said in his annual budget speech in parliament today.
On the budget:
“There are no major reforms initiatives, for example, as far as the retail sector is concerned.”
“There are no major initiatives. There are no surprises, neither are there any disappointments. The markets were relieved rather than pleased with what they have seen.”
On the government’s borrowing plan:
“It is interesting that the plan to borrow is less than expected, less by about 1.2 trillion rupees and that is very” significant.
“Any move to reduce the deficit is extremely good at a time that interest rates for the next six months are not going to go down; rather they are going to go up.
‘‘But let’s not forget, last year the fiscal deficit was compelling because of the auction of the telecommunication spectrum. It is to be seen if there have been any proposals of further privatization or further one-off sales,’’ in the coming year.
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