As Finance Minister Nirmala Sitharaman is set to unveil the Union Budget for 2024 on Tuesday, check out how the markets perform in anticipation of the budget and after.
What Happened: On average, the market tends to perform muted in the month before the budget. An average of last 5 years Nifty performance shows it has lost 0.8% in the month ahead of the budget. The best performance was in 2021 when Nifty gained 1.5% before the budget. The worst was during 2020 when Nifty fell 4.5%.
Things get a little better on the budget day as the average performance rose to 0.85%. The best performance again was in 2021 when Nifty gained 5% on the budget day. 2020 was the year again where Nifty returns were the worst with a decline of 2.4%.
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| Budget Date | One Month Before Budget | Budget Day | One Month After Budget |
| February 1, 2024 | -0.01% | -0.13% | 2.56% |
| February 1, 2023 | -2.4% | 0.3% | 0.2% |
| February 1, 2022 | 1% | 1.5% | -6.6% |
| February 1, 2021 | 1.5% | 5% | 5.9% |
| February 1, 2020 | -4.5% | -2.4% | -4% |
The returns after the budget again move into the negative territory with Nifty giving a return of -0.38%. The best performance again was in 2021. 2022 was the worst year in the last 5 years in terms of after-budget performance with a decline of 6.6%.
In the last interim budget, markets were in volatility before and during the budget day. However, after the budget, Nifty soared 2.56% in the next 30 days.
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