Will Market Bloom in Green and Break Budget-Day Jinx on July 23?

On June 4, Indian markets were in deep red following the historic Lok Sabha elections, which yielded an unusual set of results. This resulted in a significant loss of resources and the advancement of the marquee indexes and equities listed on exchanges.

Full Budget and Dalal Street 

Following the mini-chaos that occurred, the wider paradigm appears to have recovered and is now preparing for the union budget. This is a full budget, as the interim budget for the elections was submitted on February 1.

The comprehensive budget for the current fiscal year, FY25, will be announced on July 23. The session will begin in the Indian Parliament on July 22. The budget will be delivered by Union Finance Minister Nirmala Sitharaman. With this budget, Sitharaman will have presented seven consecutive budgets.

When it comes to budgets introduced by new governments, they do not often stir up the markets as one would hope. This has been witnessed in the previous two times, when the first and second Modi administrations were sworn in, and the markets responded with a tepid reaction.

When Narendra Modi became Prime Minister of India in 2014, the cabinet's first Union Budget was presented by then-Finance Minister Arun Jaitley. The complete FY15 budget was announced on July 10.

On that day, the markets were tepid, with the BSE Sensex opening at 25,513.74 points, reaching a high of 25,920.46, only to fall to a low of 25,117.00 before ending at 25,372.75 points, a 72.06-point or 0.28% decrease.

Although the NSE Nifty had a similarly dreary day, it began at 7,589.50 and reached a high of 7,731.05, as well as a low of 7,479.05, before finishing at 7,567.75, down 17.25 points or 0.23%.

Five years later, the scenario remained the same, with marquee indices dropping below prior openings.

Markets Slumped in 2019

The new (and incumbent) FM, Nirmala Sitharaman, delivered the comprehensive budget of the freshly sworn-in administration, often known as Modi 2.0. Sitharaman delivered her budget on July 5, 2019, after the BJP reclaimed power following a landslide victory in the 2019 Lok Sabha election.

On this day, the BSE Sensex started at 39,990.40 points. The index peaked at 40,032.41 and fell to a low of 39,441.38, before finishing at 39,513.39. This was a drop of 394.67 points, or 0.99%. 

The NSE Nifty performed no better, falling by more than 1%. Nifty began at 11,964.75, reached a low of 11,797.90 and a high of 11,981.75, before falling and finishing at 11,811.15, down 135.60 points or 1.14%.

It remains to be seen if the current tendency of post-result budgeting will be reversed. The markets are upbeat, but will they close in the green on July 23? Only time will tell.