As India’s Union Budget approaches, stock enthusiasts scour for clues on market direction. Does the event spark a bull run or bear hug? An exhaustive review of 15 prior budgets uncovers consistent patterns across benchmarks.
According to SBI Securities, Sensex embraced positivity one week post-budget in 11 instances, delivering 2.10% average returns. Four negative closes averaged 2.05% losses. Nifty edged ahead with 12 gains at 2.04%, three slips at 2.65%.
Three months in, Sensex’s ledger reads nine gains (6.77%) against six losses (5.28%). Nifty: identical nine positives (7.40%), six negatives (5.46%).
Mid and smallcaps amplified the action. Weekly: 11/15 gains for both Nifty Midcap 100 (3.1%) and Smallcap 100 (3.3%); losses capped at 2.7-3%.
Quarterly view: Midcaps dominated with 10 wins (8.67%) vs. five losses (7.77%). Smallcaps split 7-8, but winners averaged 14.54% vs. 8.77% losers.
This data highlights budgets as potential launchpads, especially for growth-oriented portfolios. Fiscal announcements on taxes, infra, and reforms often catalyze rallies.
Caveat: Exceptions abound, influenced by external shocks or underwhelming policies. Blend history with current analysis for robust strategies. Markets reward the informed.