By Manoj Dharra
MUMBAI (Reuters) - The BSE Sensex edged higher on Monday, marginally recovering after hitting its 2013 lows in the previous session, as recent underperformers such as Larsen & Toubro rose, while DLF gained after an executive told analysts earnings would improve.
Shares are expected to be range-bound until the 2013/14 budget is unveiled on February 28, in a critical test of whether the government will announce a plan to contain the fiscal and current account deficits.
The finance minister plans to cut the public spending target for fiscal 2013/14 by up to 10 percent from this year's original target, government sources told Reuters, in what would be the most austere budget in recent history as he tries to avert a sovereign credit downgrade.
Such a plan could spark gains in domestic shares. After surging 25.7 percent in 2012, the Sensex has stalled and is up only 0.38 percent so far this year.
"Earnings season has been not bad but not good either, and now eyes are on budget which has to be responsible as exports are not looking good," G. Chokkalingam, executive director and chief investment officer, Centrum Wealth Management, said.
"You are dependent only on FII money to support current account deficit, so finance minister has to favour markets and economy, there is no other choice," he added.
Sensex rose 0.17 percent, or 32.93 points, to end at 19,501.08, recovering from its lowest close since December 31, 2012, hit on Friday.
The broader NSE Nifty rose 0.18 percent, or 10.80 points, to end at 5,898.20.
The gains were led by a pick-up in shares where selling was seen as overdone. Larsen & Toubro Ltd
State Bank of India gained 1.3 percent. Its shares have fallen 8.4 percent so far this month as on Friday's close, after Oct-Dec earnings disappointed.
Among other gainers, shares in DLF Ltd
Public sector companies MMTC Ltd
The government is yet to provide a time frame for the stake sales.
India will allow wireless broadband airwave holders to provide voice services if they pay an additional $306 million, a senior government official said on Monday, a move likely to boost billionaire Mukesh Ambani's Reliance Industries Ltd
Reliance shares ended 0.2 percent higher.
However, Jet Airways
Tata Consultancy Services Ltd
(Additional reporting by Abhishek Vishnoi; Editing by Sunil Nair)