In view of the economic slump hitting India across sectors, FM Sitharaman doled out a relief package, much taking into account the fiscal deficit target for the FY'20, without going overboard.

Bond yield fell in line by more than 6 bps. 1 basis point is one hundredth of a percentage point.

Sentiment also got a lift with the decline in global crude oil price and US bond yield. Global crude oil price have went lower by 2% after pressure due to escalation of US-China trade war.

At 9.13am, the 10-year government bond yield was at 6.517% compared with its previous close of 6.574%. Bond yield and prices move in opposite directions.

"The growth slowdown is part-cyclical and part-structural. To counter it, there are typically four policy levers: fiscal, monetary, reforms, and exchange rate. So far, monetary policy has done much of the heavy lifting. The government has now demonstrated its penchant for triggering the levers of reforms and possibly exchange rate, while still keeping the powder dry on fiscal stimulus" said Nomura Research in a note to its investors.

"Not opting for short-term populism lends credence to the observation that the government's focus remains firmly on an investment-led recovery (rather than excessive reliance on consumption). In our opinion, this is the correct approach. Continued fiscal prudence and commitment to reforms should be seen positively from a monetary policy perspective", the research firm added.

On the sidelines, rupee again retreated lower to 72.16 after most emerging market currencies came under pressure due to trade spat. Yuan weakened to its lowest in 11 years.

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