Indian shares rose on Thursday, December 5 ahead of a widely expected interest rate cut by the country's central bank to fire up slowing growth in Asia's third-largest economy. The NSE Nifty 50 index rose 0.14% to 12,065.25 and the S&P BSE Sensex gained 0.17% to 40,927.11 by 0347 GMT.
The Reserve Bank of India (RBI) is likely to cut rates by 25 basis points later in the day, according to economists polled by Reuters. However, the sixth rate cut this year will only marginally boost the economy or may not have any impact as sentiment and risk appetite remained weak, the economists said in the poll.
Nifty rose to 7.7%, Sensex gains 8.43%
India's economic growth slowed to 4.5% in the July-September period, its weakest pace since 2013, putting pressure on Prime Minister Narendra Modi to speed up reforms. The Nifty has risen 7.7% and the Sensex has gained 8.43% since the last rate cut in October, mainly due to measures such as reducing the corporate tax rate and expectations of more stimulus.
The benchmark 10-year bond yield and the rupee were trading flat ahead of the decision. Some investors and traders expect the rate cut to be as high as 50 basis points, said Vinod Nair, head of research at Geojit Financial Services.
Reliance Industries tops Nifty
Meanwhile, MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3% on signs the United States and China were on track for a preliminary trade deal. [MKTS/GLOB]. Among the domestic sectors, banks led gains in early trading. The Nifty banks index rose 0.4%, while the state-owned banks' index climbed 0.7%. India's most valuable company Reliance Industries rose 1.37% to the top of the Nifty, while Bharti Airtel was the biggest laggard, dropping 1.43%.
