In the past, the budget has seen a diverse set of reactions, ranging between both extremes.
Budget 2023, was the last full budget of Modi Government 2.0, being the last full budget, the budget was more focused on Infrastructure Growth, Green Energy, E-Vehicles, and benefit to poor and economically weaker sections of society. The Budget was Agriculture, and Industry based.
Mr. Rajesh Agarwal, Founder, and proprietor of SSIC (Shreeman shares and investments consultants) says, it is interesting to note that Budget Day reaction hasn’t been too extreme, with gains/losses not exceeding 2% in 8 out of the last 10 years. Further, on a one-month timeframe post the Budget announcement, gains/losses have not exceeded 6% in 7 out of the last 10 years.
Below is a brief about the Budget Day reaction for each of the last 10 years:
Budget 2014
A new government was elected in 2014, led by the BJP, and then finance minister Arun Jaitley presented its first Union Budget on July 10. On Budget day, Nifty witnessed a minor selloff, closing the session with a loss of 0.2%. However, the markets were quite volatile.
Budget 2015
Then finance minister Arun Jaitley presented its second Budget in February 2015. The market reacted marginally positively to the Budget and ended the session with a gain of 0.7% and ended at 8845.
Budget 2016
The Budget 2016 proposals fell short of market expectations, which were announced by Arun Jaitley on February 29. On Budget day, Nifty closed with a marginal loss of 0.6% and ended at 7030. Post Budget, sentiment turned positive where Nifty witnessed a strong rally of more than 10% in the month, registering the largest gains since 2011.
Budget 2017
This year, the government ended its tradition of presenting a separate Railway Budget and negated the practice of presenting the Union Budget at the end of February and shifted it to February 1. The market responded positively, and ended the budget day with a gain of 1.8% and ended at 8561, It was the highest budget day gain between 2011-2020.
Budget 2018
Then finance minister Arun Jaitley presented his final budget on February 1 and it was the first Union Budget after the implementation of the Goods and Services Tax (GST). The Budget failed to meet the Market expectations and the Nifty closed on a cautious note with a minor loss of 0.2% and further leading to a decline of 6% in Nifty in a month, the second worst month between 2011-2021.
Budget 2019
In Budget 2019, Nirmala Sitharaman became the new finance minister and the first full-time female finance minister in India. However, the Union Budget failed to impress the street as she failed to provide clarity on the major announcements made by the acting finance minister in the interim budget. The Budget was presented on July 5 and Nifty closed with a loss of 1.1%. The sentiment continued to deteriorate, with Nifty losing 8% in a month after the budget announcement.
Budget 2020
Finance minister Nirmala Sitharaman presented its second Budget on February 1. The market showed a thumbs down for the second consecutive Union Budget, with Nifty closing lower by 2.5% on the budget day.
Budget 2021
After two consecutive disappointing budgets, Nirmala Sitharaman presented her third Budget, where the street gave a big thumbs up and Nifty delivered the best budget day gains since 1999. This was the first time that the Indian Union Budget was presented digitally in a ‘Made in India’ tablet device due to the ongoing Covid-19 pandemic. The budget was presented on 1 February and Nifty settled on a strong note, ending the day 4.7% higher.
Budget 2022
Finance minister Nirmala Sitharaman delivered the budget on 1 February. The Nifty rose for the second consecutive time on Budget day and welcomed Budget 2022 with great vigour. The Nifty closed the budget day session on a cheerful note, rising 1.4%. However, the sentiment turned sour and the Nifty saw the fourth worst month between 2011-2022, shedding 4.5%.
Budget 2023
Finance minister Nirmala Sitharaman delivered the budget on 1 February. The Nifty rose for the second consecutive time on Budget day and welcomed Budget 2023 with great vigour. The Markets rose 2%, during the trading session and closed flat at 0.26%.
However, the analysis of the Budget Day reaction shows that the market lost value six times in the last 10 years, including the interim Budget. The same story repeated itself even in a one-month timeframe post the Budget announcement, with Nifty losing value six times in the last ten years.
