Post-Budget rally? Market has gained upto 10% on 4 out of 10 occassions

The government is expected to present its Union Budget on February 29, however Indian markets are currently reeling under pressure due to volatile global environment, while many participants remain mindful of what proposals could be present and their likely impact on stocks.

Sensex in one occasion only out of past ten has recorded a gain during the month before the Union Budget’s presentation, which was in interim budget of 2014. However, there has been four occasions out of ten, when Sensex had risen between 5-10% in one month post budget presentations, these gains were in 2009, 2010, 2011 and 2014.

Analysts said Sensex has dropped close to 10% from its high this year so far, hence there are chances that markets may bounce back if the government presents an investor friendly and growth oriented budget, as investors who currently worried about global market volatility are likely to purchase stocks post budget announcements.

“We expect some rally in markets in the run up to Union Budget,” said Ajay Bodke, CEO and chief portfolio manager – PMS at Prabhudas Lilladher. “However investors need to remain watchful as Indian markets are likely to be influenced by global headwinds.”