How Sensex, Nifty have performed on Budget days in the past

By Somil Mehta,The Union Budget is 1 of the astir important events for Indian banal markets. Every twelvemonth connected February 1, investors intimately ticker however the Sensex and Nifty respond to announcements connected taxes, authorities spending, reforms, and fiscal discipline.

There is ever excitement, speculation, and nervousness astir Budget Day. But past shows that marketplace reactions connected Budget Day are often mixed and unpredictable.If we look astatine marketplace behaviour implicit the past decennary oregon so, 1 happening becomes clear, Budget Day is seldom a one-way trade. While immoderate Budgets person triggered crisp rallies, galore others person seen muted oregon adjacent antagonistic reactions.Markets thin to respond positively erstwhile the Budget focuses connected growth, infrastructure spending, and taxation stability.

For example, successful 2017, Finance Minister Arun Jaitley avoided large taxation hikes and provided alleviation to the mediate class. This was good received by investors. The Sensex roseate astir 1.7%, portion the Nifty gained adjacent to 1.8%, making it 1 of the amended Budget Day performances successful that period.Another standout twelvemonth was 2021, erstwhile Finance Minister Nirmala Sitharaman presented the Budget successful the aftermath of the COVID-19 pandemic.

The absorption was intelligibly connected economical recovery, higher superior expenditure, healthcare, and infrastructure. Markets responded powerfully to this growth-oriented approach. The Sensex surged implicit 2%, portion the Nifty roseate astir 2.7%, marking 1 of the strongest Budget Day rallies successful caller years.However, not each Budgets person been market-friendly. In 2016, the announcement of higher dividend taxation disappointed investors.

The Sensex closed little that day, reflecting concerns astir the interaction connected firm profitability and capitalist returns. In 2018, agelong word superior gains taxation successful listed equities and equity communal money was introduced, which took markets by surprise. The indices closed modestly little but fell sharply ~6.8% implicit the adjacent fewer sessions.

Similarly, 2023 saw a mostly level marketplace reaction. While the Budget maintained fiscal discipline, it did not denote immoderate large reforms that could excite traders successful the abbreviated term.

The 2024 July Budget besides led to a cautious marketplace response. Changes related to superior gains taxation came arsenic a astonishment to immoderate investors. Although the marketplace absorption was not severe, some Sensex and Nifty ended the time somewhat lower, showing however unexpected taxation measures tin impact sentiment adjacent if the broader system remains stable.One important constituent investors often place is that Budget Day show does not ever bespeak the market’s adjacent move.

In respective instances, markets that roseate connected Budget Day corrected successful the pursuing weeks, portion immoderate Budgets that initially disappointed investors aboriginal led to beardown medium-term rallies erstwhile the interaction of policies became clearer. Historically, post-Budget volatility has been common, and one-month returns aft the Budget person often been mixed.On the different hand, abrupt taxation changes oregon deficiency of betterment momentum tin dampen sentiment.As we attack Union Budget 2026, marketplace conditions are already volatile. Equity indices person corrected from caller highs, overseas portfolio investors person been nett sellers, and planetary factors specified arsenic involvement rates, geopolitical tensions, and commercialized policies proceed to power sentiment. In specified an environment, Budget Day volatility is astir inevitable.For investors, past offers an important lesson, bash not instrumentality oversized bets purely connected Budget Day expectations.

Short-term reactions tin beryllium misleading. A diversified portfolio, absorption connected prime stocks, and alignment with semipermanent themes thin to enactment amended than trying to foretell one-day marketplace moves.In conclusion, the Union Budget often sets the tone, but it does not determine marketplace absorption successful a azygous day. As Finance Minister Nirmala Sitharaman prepares to contiguous Budget 2026, investors should enactment cautious, ticker argumentation intent closely, and retrieve that sustainable returns are built implicit time—not successful 1 trading session.(Somil Mehta is Head of Retail Research astatine Mirae Asset ShareKhan.)(Disclaimer: Recommendations and views connected the banal market, different plus classes oregon idiosyncratic concern absorption tips fixed by experts are their own. These opinions bash not correspond the views of The Times of India)