Finance Minister Nirmala Sitharaman is all set to present the Union Budget for 2024-25 on Tuesday, July 23. The Union Budget has been a key trendsetter for the Indian stock market, with the announcement being associated with market volatility.
According to data available from the last ten years, the Indian market closed in a negative note in eight out of ten sessions on the budget announcement day (Feb 1).
On Feb 1, 2024, the Indian stock market saw increased volatility. The BSE Sensex dropped by 106.81 points, or 0.15%, ending the day at 71,645.30, while the NSE Nifty declined by 28.25 points, or 0.13%, closing at 21,697.45.
Meanwhile, last year same day, Indian indices concluded with mixed results. The Sensex finished 158 points, or 0.27 percent, higher at 59,708.08, whereas the Nifty closed at 17,616.30, down 46 points, or 0.26 percent. This marked the first time since 2018 that Indian indices moved less than one percent on budget day; in 2018, the market ended nearly unchanged, with a decline of just 0.1 percent.
| Year | Nifty performance on Budget day (%) |
| 2024 | -0.13 |
| 2023 | -0.2 |
| 2022 | 1.4 |
| 2021 | 4.7 |
| 2020 | -2.5 |
| 2019 | -1.1 |
| 2018 | -0.1 |
| 2017 | 1.8 |
| 2016 | -0.6 |
| 2015 | 0.6 |
| 2014 | -0.2 |
Additionally, the market increased by more than 4 percent on budget day in 2 out of those 9 sessions. Specifically, in 2021, the market rose by 4.7 percent on budget day, and in 2001, it also surged by over 4 percent on the same day.
In 2023, both the pre-budget and post-budget months experienced declines, each falling by more than 2 percent. Similarly, in 2022, the Nifty dropped by 3 percent in February (post-budget) and decreased by 0.1 percent in January (pre-budget).
In 2021, the market witnessed a decline of 3.5 percent in the month leading up to the budget, but increased by about 2 percent in the month following the budget.
In 2020, during the pandemic, the market declined in both the pre-budget and post-budget months, falling 1.8 percent and 3 percent, respectively.
The market was last in the green during the pre-budget month in 2018, with a 5.6 percent increase. Prior to 2018, the largest gains in a pre-budget month were in 2002 and 2000, each with an 11 percent rise. Conversely, the most significant market surge in the post-budget months occurred in 2016, with a 10.75 percent increase.
Market ahead of Union Budget 2024-25
Indian stock market benchmarks, the Nifty 50 and the Sensex, ended in the red on Monday, July 22, ahead of the Union Budget 2024. The Nifty 50 dropped by 22 points, or 0.09 percent, to close at 24,509.25, while the Sensex fell by 103 points, or 0.13 percent, to settle at 80,502.08. In contrast, the mid and small-cap segments showed healthy gains, disregarding the caution surrounding the upcoming Budget.
“Nifty witnessed a volatile session before the much awaited budget announcement day which would be the deciding factor for further directional trend of the indices. The Nifty index would have the crucial suport of 24150 zone while on the upside, a decisive breach above 24800 levels would trigger for furhter fresh upward move in the coming days,” said Vaishali Parekh, Vice President – Technical Research, Prabhudas Lilladher Pvt. Ltd.