The domestic bourses, which has been experiencing a tug-of-war between bulls and bears in recent past, is expected to remain volatile ahead of Saturday’s Union Budget 2025, which will set the share market's tone for the coming weeks. In the second full-fledged budget of the Modi 3.0 government, the Finance Minister Nirmala Sitharaman will lay down the economic roadmap for the country for the next fiscal and market reactions on the Budget day will give an indication of what investors think of the government’s vision for the economy. 

"The Budget - expectations and actuals - will influence the market today and tomorrow. Since we are going into the Budget without a pre-Budget rally, the probability of a rally, post Budget, will be high if the Budget delivers on growth stimulating initiatives like cuts in personal income tax,” says V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Vijayakumar says that the impact of the Budget will last only for a few days, and the medium to long-term trend of the market will be dictated by GDP and earnings growth. “Therefore, investors should look for cues on these crucial macro trends”.

Over the past ten years, the BSE benchmark Sensex has experienced its fair highs and lows on the Budget day, with the barometer of the Indian stock market closing higher on six occasions, while it settled in negative terrain four times. The 30-share benchmark index registered its strongest rally of 5% on the 2021 Budget day, while it logged the biggest loss of 2.4% on the eve of the Budget in 2020.

Over the past ten years, the BSE benchmark Sensex has experienced its fair highs and lows on the Budget day, with the barometer of the Indian stock market closing higher on six occasions, while it settled in negative terrain four times. The 30-share benchmark index registered its strongest rally of 5% on the 2021 Budget day, while it logged the biggest loss of 2.4% on the eve of the Budget in 2020.

Here are the details of the performance of the Sensex on the budget day in the last 10 years:

Budget 2024

The FM Nirmala Sitharaman presented the first full-fledged Budget of the Modi 3.0 government on July 23, which triggered heightened volatility throughout the day. The BSE Sensex settled lower by 73 points, or 0.09%, at 80,429.04 after falling as much as 1200-odd points in intraday trade, as sentiments were dented by the government’s proposal to raise the tax on capital gains and on trading derivatives. 

On February 1, 2024, when FM Sitharaman presented the interim budget, ahead of the 2024 Lok Sabha elections, the market closed marginally lower in choppy trade as investors opted for profit-taking amid mixed cues. The BSE Sensex settled 106.81 points, or 0.15%, lower at 71,645.

Budget 2023

The domestic benchmark indices reacted with mixed emotions to the Union Budget 2023, as excitement of the day was fizzled out by the Hindenburg-Adani saga. Adding to it, caution prevailed in the market ahead of the U.S. Fed policy meeting. On February 1 2023, the BSE benchmark Sensex ended 158 points, or 0.27%, higher at 59,708, paring most of early gains. During the session, the benchmark index rallied as much as 1,223 points, or 2%, to 60,773 after FM proposed measures to boost consumption and capex.

Budget 2022

The Dalal Street gave a thumbs-up to the Union Budget 2022, ending the session on a strong note. The BSE Sensex closed 848 points higher at 58,862, after rising 1,000 points during the session to hit a high of 59,032. The sentiment was lifted after Nirmala Sitharaman, who presented her fourth straight Budget in Parliament, made slew of announcements to boost growth amid continued disruption from covid-19 pandemic and rising inflation. 

Budget 2021

The FM Nirmala Sitharaman presented the Union Budget on February 1, which was considered as the most crucial in recent times in the backdrop of Covid-19 pandemic which had rattled economic growth. The stock market registered its best performance in the past 20 years, with the benchmark indices notching 5% gain, as the government focused on disinvestment and increasing FDI exposure for the insurance sector, without tinkering the direct taxes, capital gains taxes or security transaction tax. The BSE Sensex rallied 2,300 points, or 5%, to close at 48,600, and the NSE Nifty surged 647 points, or 4.74%, to settle at 14,281.

Budget 2020

The share market witnessed one the biggest fall on the Budget Day, i.e. February 1, 2020, in the past 12 years after the FM Sitharaman announced no major relief for the stock market in her first Budget speech. The BSE Sensex tumbled 988 points, or 2.43%, to close at 39,735, and the Nifty50 declined 300 points, or 2.51%, to end at 11,662.

Budget 2019

The domestic benchmark ended higher on the interim budget day in 2019, presented by acting finance minister Piyush Goyal. The market cheered Goyal’s proposal to double the threshold tax exemption limit to Rs 5 lakh and increased the standard deduction to Rs 50,000 from Rs 40,000, while presenting a farm-friendly, consumption-oriented budget ahead of the general elections. The Sensex settled 212 points, or 0.59%, higher at 36,469, while the Nifty ended just short of the 10,900-marks.

On July 5, 2019, when the Modi government’s present its first Budget after coming back to power for the second time, the equity market ended on a negative note. The Sensex closed 395 points down at 39,513.39, while the Nifty closed near the 11,800-mark.

Budget 2018

In 2018, the then finance minister Arun Jaitley presented the last full-year Budget before the Lok Sabha Elections in 2019. The stock market had reacted cautiously to Budget proposals, with Sensex ending marginally lower by 0.16%. Sentiments turned weak after the central government introduced long term capital gains tax in the Budget and also a proposal for higher dividend distribution tax on those earning more. The government also announced an increase in securities transaction tax on options and dividend tax on above ₹10 lakh dividend receipts.

Budget 2017

The BSE Sensex ended 1.76% higher on the Budget day of 2017, registering its best performance between 2010 and 2019. The market reacted positively to the Budget proposals as late FM Arun Jaitley made no reference to long term or short term capital gains tax on equities.

This was the year when Narendra Modi government scrapped the practice of presenting the Union Budget at the end of February and shifted it to February 1. The government also ended the tradition of presenting a separate Railway Budget, ending a colonial-era practice.

Budget 2016

In 2016, the Union Budget was tabled in the Parliament by Jaitley on February 29. The Sensex fell 0.66% to close above the 23,000 mark as budgetary proposals fell short of market expectations.

Budget 2015

In 2015, the benchmark index, Sensex gained 0.48% to close higher at 29,362 points as traders reacted positively to the first full-fledged Budget of PM Narendra Modi-led NDA government. The budget was presented by late finance minister Arun Jaitley, who proposed to reduce corporate taxes from 30% to 25%, while it also deferred General Anti-Avoidance Rule (GAAR), an anti-tax avoidance law to curb tax evasion and avoid tax leaks.