Equity market: Pre-Budget month and the bear grip

Indian equity market has post its second worst monthly performance before the Union Budget in last eight years. While the Sensex never gained in the month ahead of the Budget in the last 10 years, this time it has shed 5.46 per cent in the last one month as investors are uncertain about the outcome of the Budget.

Foreign institutional selling has contributed to the weakness in a big way. In February 2013, the Sensex fell 6.18 per cent due to inflation and crude price, general uncertainty and global weakness.

On Monday, investors will watch government’s measures to revive the economy, while keeping fiscal deficit under check.

" Bank capitalisation will be keenly watched, as will be tax measures or more importantly withdrawal of tax incentives. The 7th Pay commission payout bonanza can drive consumer stocks, while agri-related measures have the potential to drive rural and farm related sectors," said Ravi Shenoy, AVP- midcaps research, Motilal Oswal Securities. "Next month will be the 13th month since the start of the correction and analysts see some revival in March".