In the last five years, the BSE Sensex has given positive returns to investors four times on the Budget day and the benchmark rallied the most by 5 per cent on the closing trade in 2021.
Barring February 1, 2020, when the 30-share BSE benchmark ended 987.96 points or 2.42 per cent lower, the bellwether index ended in the positive territory on the Budget day in the year 2023, 2022, 2021 and 2019.
Finance Minister Nirmala Sitharaman will present the interim Budget on Thursday.
“We anticipate that Budget 2024 might not bring significant shifts in the stock market or investor portfolios, but it’s crucial to closely analyse any key announcements for their market impact. This year, market dynamics are expected to be shaped by political and economic factors, with a clear focus on capital expenditure rather than short-term populist measures,” Suman Bannerjee, CIO of Hedonova, a Paris-based hedge fund, said.
Last year on the Budget day, the BSE benchmark ended at 59,708.08 points, up by 158.18 points, or 0.26 per cent.
In 2022, the Sensex jumped 848.4 points or 1.46 per cent while in 2021, it rallied 2,314.84 points or 5 per cent after the Budget announcements.
“With the recent triumph in state elections, the upcoming interim Budget for 2024 appears to steer clear of grand populist gestures. Instead, the focus would be on maintaining the status-quo with a keen eye on policy continuity,” according to a report by brokerage firm Sharekhan by BNP Paribas.
“We expect a vibrant narrative around crucial elements such as capital expenditure, the ‘Make in India’ initiative, and a green energy push,” the report said.
In 2020, the BSE bechmark fell 987.96 points or 2.42 per cent and in the prior year, it clocked a gain of 212.74 points or 0.58 per cent.
“2024 appears promising with the markets hitting a new high and economic growth is healthy especially in the context of a slowdown globally,” the report said.
The BSE benchmark reached its all-time high of 73,427.59 points on January 16, 2024.
“As for the markets, we foresee no immediate reaction with the Budget announcement. The announcement comes soon after the Fed announcement on the 31st, hence the market reaction for the next few weeks will be from a combination of the Budget and the Fed announcement,” Ashwini Shami, smallcase Manager, EVP & Portfolio Manager at OmniScience Capital, a global investment management firm, said.
On Wednesday, a day before the Budget announcement, the BSE Sensex jumped 612.21 points or 0.86 per cent to settle at 71,752.11 points.
“Although there would be some buildup of expectations ahead of the vote on account, we think that major policy reforms and announcements may get postponed to the regular Budget due in June/July 2024. Capex and fiscal consolidation path followed in the vote on account would be monitored closely given their impact on growth and interest rates.
“The capital markets may get a little excited ahead of and post the vote on account but may prefer to wait for the general election outcome and the regular Budget before getting very bullish,” Deepak Jasani, Head of Retail Research, HDFC Securities, said on what stock markets should expect from this year’s Budget.
Also Read: Budget 2024: FM Nirmala Sitharaman Arrives At Finance Ministry
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