Budget 2016: Here’s why Sensex may head northwards after the Budget

The government is scheduled to present Union Budget on February 29. Market participants remain mindful of probable proposals and their likely impact on stocks, as Indian markets are currently reeling under volatile global environment.

Interestingly, Sensex’s performance one month after the Budget tends to be strong, shows data for last ten Budgets. There have been four occasions out of ten, when Sensex had risen about 5-10 per cent in one month post Budget, these gains were in 2009, 2010, 2011 and 2014.


Market participants who are wary about the global markets are likely to purchase stocks post the Budget announcements based on its impact on companies. Only on one occasion out of the past ten, did Sensex record a gain during the month before the Budget — interim Budget of 2014.

Analysts said Sensex has dropped over 12 per cent from its high this year so far and hence, there are chances that markets may bounce back if the government presents an investor-friendly and growth-oriented Budget, as investors who are currently worried about the global market volatility, are likely to purchase stocks post Budget