Budget and stock markets: How Sensex, Nifty have fared on D-Day in last 15 years

Sensex and Nifty have delivered a mixed but slightly positive record on Budget days over the past 15 years, with headline indices more often ending in the green but still prone to sharp swings on the event day. On average, Sensex has returned 0.35% on Budget day across the last 15 years, underscoring that the event itself has typically not been a make-or-break session for largecaps when viewed in aggregate.

Despite high intraday volatility and heavy news flow, Budget day returns have largely been range-bound at the index level, with no persistent directional bias emerging from the event alone.

Nifty’s Budget day trajectory has broadly mirrored Sensex, with the index oscillating between sharp gains and steep cuts in individual years but settling into a low single-digit average change when the period is taken together. Headline Budget announcements often trigger knee-jerk reactions, but the closing print tends to reflect a more balanced assessment by institutional and long-only investors.


The picture turns more constructive once the initial dust settles, with both indices showing a higher probability of gains in the sessions after the Finance Minister’s speech.

Over the last 15 Budgets, Sensex has closed higher in 11 out of 15 weeks post Budget, with an average one-week gain of 1%, while Nifty has risen in 12 out of 15 such weeks, with an average gain of 1.10%, according to SBI Securities.

“The data suggests that investors often use post-Budget volatility to accumulate largecaps, leading to a positive bias over the next few sessions,” the report says, adding that the strike rate of positive weeks is materially higher than the Budget day hit rate. Even at the one-month horizon, both indices have delivered more green outcomes than red, reinforcing the notion that markets eventually move beyond the headline noise to focus on earnings and macro visibility.

At a three-month horizon, medium-term fundamentals and global cues start to matter more than the Budget headline, but the historical numbers still show an edge in favour of gains.

Sensex has finished higher in nine out of the last 15 three-month periods after the Budget, with an average gain of 6.77% in those positive episodes, while Nifty has matched the 9-of-15 success rate with a slightly stronger average return of 7.40% in up phases.

Whenever markets entered the Budget with weak sentiment and corrections of more than 3% in the preceding month, the subsequent one-week, one-month and three-month returns have tended to be notably stronger, indicating the role of mean reversion. Taken together, the study concludes that while Budget day itself remains a high-volatility, low-visibility event, investors who look beyond the first day and stagger purchases over the following weeks have historically been better rewarded.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)