Finance Minister Nirmala Sitharaman will table her fifth Union Budget in Parliament on 1 February 2023. Markets have turned volatile in the last one week in the run-up to the Union Budget; this is keeping in trend with the one month performance of stock market prior to the Budget in the last five years. Benchmark Nifty 50 fell four times on a monthly basis ahead of the Union Budget, out of the last five years. Except in 2018, when the index jumped around 4% in a month in the run-up to the event, the index fell 0.2%-2.5% in the other four years.

How stock market performed on Budget Day

On Budget day itself, Nifty 50 fell five times and gained five times in the past 10 years. In 2022, frontline indices surged to end 1.4% higher as investors gave a thumbs up to the pro-growth Budget. Nifty gyrated 367 points intra-day to hit a high of 17,622 before it eventually closed at 17,577, up 237 pts. The index moved in a 4.9% range in 2021 on the Budget day, where it eventually closed the day 4.7% higher. On February 1, 2020, the index ended 2.5% lower. In 2019, the 50-stock NSE barometer closed 0.6% higher. In 2018, Nifty closed mildly in red, while the index gained 1.8% in 2017.

Last year on the Budget day, Sensex settled at 58,862.57, up 848.40 points or 1.5%. The BSE Midcap and SmallCap indices added about 1?ch on Tuesday. Bulls cheered the long-term growth-oriented budget, given no headroom for cautiousness & populist measures. Sectorally, while the Nifty Metal index jumped over 4%, Nifty Pharma, IT, and Bank were other indices that jumped 1-2.5%. On the flip side, Nifty Auto index fell nearly 1%. In the last 10 years, benchmark indices posted their biggest Budget Day gain in 2021 with the Nifty surging nearly 5% that day as investors cheered the announcement made by FM Sitharaman. In the last ten years, while Bank Nifty gained six times on D-day, it ended in red in 2016, 2018, 2019, and 2023.

How Nifty performed one month after Union Budget in last 5 years

In the month after the Budget presentation, Nifty 50 has fallen four times in the last five years. Last year, the index tumbled more than 6% from 2 February to 2 March. In 2021, the index gained around 3% in a month. While it ended nearly flat in 2019, it the NSE barometer slumped around 4% in 2018 and 2020.

It is worth noting that the Finance Minister’s core team of budget makers includes bureaucrats from the Ministry of Finance. The team preparing Budget 2023 includes FM Nirmala Sitharaman; Finance Secretary TV Somanathan; Ajay Seth, Secretary in charge of the Department of Economic Affairs; Tuhin Kanta Pandey, DIPAM Secretary; Sanjay Malhotra, Secretary in Department of Revenue; Vivek Joshi, Secretary, Department of Financial Services; and V Anantha Nageswaran, Chief Economic Advisor.