Sensex closes higher ahead of Budget

Indian shares closed higher on Thursday, a day before the federal budget that is expected to cut taxes on business and raise spending to breathe some life into a stagnating economy.

Earlier in the day, government forecast economic growth could get back up to 7% this year, but cautioned it will face challenges keeping its fiscal deficit in check.

The broader NSE Nifty closed 0.25% higher at 11,946.75, while the benchmark BSE Sensex settled 0.17% firmer at 39,908.06.

The Nifty PSU bank index, which tracks India's state-owned lenders, finished the session 1.28% higher.