Budget Day Nifty Returns: The stock market has given limited returns on the budget day in the last 15 years and the average return of the Nifty index on this day has been only 0.2 percent. These figures have been given by Apoorva Sheth, Head of Market Perspectives and Research, SAMCO Securities. Apoorva Sheth said that it is clear from the data of the last one and a half decade that the budget day has generally not proved to be a big trigger for the stock market. Also, the excitement created in the market regarding the budget often does not translate into any major trading movement.
Apoorva Sheth said that investors start paying attention to the market much in advance regarding the budget. But historical data shows that market movements on Budget day are often limited and volatile.
Based on the data from 2010 till now, Sheth said that on the budget day, the average movement of Nifty 50 index has been only 0.19 percent, while the average movement of Nifty Bank has been 0.42 percent. There has been a wide variation in results across different years, indicating that budget day moves depend more on positioning and pre-built expectations than policy announcements.
Generally the period before the budget is full of caution. During this period, investors appear to be reducing risks. According to the data, the average return of Nifty during the pre-budget phase has been –0.46 percent and that of Nifty Bank has been –0.03 percent, which points towards profit booking before the budget.
In contrast, the market has performed comparatively better in the post-Budget phase. The next day after the budget, Nifty has given an average return of 1.35 percent and Nifty Bank has given an average return of 1.69 percent. During this period, investors focus more on clarity in policies, liquidity, earnings outlook and growth visibility.
According to SAMCO analysis, on Budget day, February 26, 2010, the Nifty rose by 1.2 percent, while the previous returns were 1.6 percent and the subsequent returns were 4.1 percent. At the same time, after the budget date was changed to February 1 in 2017, the average movement of Nifty on the budget day has been around 1.8 percent.
If we look at the budget of 2025 last year, Nifty closed with a slip of 0.11 percent on that day. However, a day before that the index had gained 2.8 percent, while the return after the budget was –0.43 percent.
According to Apoorva Sheth, “Budget day itself rarely presents the biggest earning opportunity. History shows that investors with patience have benefited more. Pre-Budget volatility provides positioning opportunities, while post-Budget time has proven to be more stable and return-friendly.”
Disclaimer: The views and investment advice given by experts/brokerage firms on Moneycontrol are their own and not those of the website and its management. The website or management is not responsible for this. Moneycontrol advises users to consult certified experts before taking any investment decision.