Mapping Indian Market Performance Around Past 10 Budgets

In the weeks leading to the budget, the Nifty Bank and Nifty FMCG indices rose seven times out of 10, with an average gain of 0.17% and 0.79%, respectively.

In the week following the budget, the strongest trend was seen in Nifty Energy index, which fell eight times out of 10, with an average decline of 1.02%.

During the past 10 budgets, Nifty 50 rose five times and fell five times, excluding the interim budget. On average, the index showed a marginal decline of 0.06% the week before and 0.04% the week after the budget. This compares to an average weekly return of 0.27% for the index since 2014. 

In absolute terms, the benchmark, after balancing the advances with the declines and focusing solely on the swing range on either side of the budget, saw the Nifty 50 move 2.16% before and 2.52% after the announcement. This compares to a 1.63% move on either side in any given week since 2014, implying that the weeks around budget have been volatile. 

Over the past four budgets, Nifty 50 has consistently declined during the week leading up to the announcement, reversing an earlier trend of consistent advance that has been recorded every year since 2014. 

In the week following the last four budgets, the Nifty rose in all but one.