January 1, 2020 / 4:55 AM / 25 days ago

Indian shares start 2020 on a high note, infra stocks gain

BENGALURU, Jan 1 (Reuters) - Indian shares rose on Wednesday following a New Year’s Eve selloff, as infrastructure stocks gained after the government unveiled plans for major investments in the sector.

On the first trading session of the year, the NSE Nifty 50 index was up 0.23% at 12,196.30 by 0432 GMT, while the S&P BSE Sensex rose 0.22% to 41,346.11.

With an aim to boost sagging economic growth, India's finance minister on Tuesday announced here a slew of investments in roads, railways, airports and agricultural projects over the next five years, projecting a total expenditure of about 100 trillion rupees ($1.4 trillion).

About 78% of the spending would be split equally between the federal and state governments, while the remaining 22% would come from the private sector, the finance ministry said in its National Infrastructure Pipeline report.

Analysts said the plan would help ramp up the pace of construction over the next few years and likely require higher allocations in the union budget that is due to be presented next month.

“Availability of funds may turn out to be a key limiting factor for such an ambitious plan,” analysts at Motilal Oswal Financial Services Ltd said.

Adani Ports and Special Economic Zone Ltd, telecom tower builder Bharti Infratel Ltd and engineering and construction group Larsen & Toubro Ltd were the top three gainers on the Nifty 50, with gains of 1.5%-1.7%.

The Nifty Infrastructure index, which tracks everything from construction firms and cement producers to oil refiners and airlines, was up 0.54%.

InterGlobe Aviation Ltd and SpiceJet Ltd , India’s top two airlines by market share, climbed 0.5% and 1.8%, respectively.

On Tuesday, the Nifty and Sensex ended lower as investors booked profits. The Nifty clocked a 12% gain for 2019, while the Sensex advanced 14.4%. ($1 = 71.3200 Indian rupees) (Reporting by Sachin Ravikumar; Editing by Subhranshu Sahu)

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