Sensex, Nifty dip, India VIX surges ahead of Budget 2026; what historical data says

Benchmark indices Sensex and Nifty fell while fear gauge India VIX spiked on Friday in the final trading session before the Union Budget 2026 on February 1. Historical data since 2014 suggests the two indices delivered positive returns in nine of the 15 instances, including interim Budgets. India VIX has, on the other hand showed extreme movement ahead of the D-Day, data showed.  

On Friday, Sensex dropped 504.50 points or 0.61 per cent to 82,061.87. Nifty was trading at 25,251.95, down 166.95 points or 0.66 per cent. India VIX jumped 3.66 per cent to 13.86. A day before the Budget 2025, Nifty surged 1.1 per cent while Sensex gained 0.97 per cent. India VIX declined 6.57 per cent for the day. 

The two indices edged lower a day before the full Budget 2024-25 presented on July 23, 2024. India VIX had spiked 4.13 per cent on the day, data compiled by SBI Securities suggested.  

A day before interim Budget, earlier in the year, saw Nifty and Sensex gaining around 1 per cent each. India VIX remained steady. 

The two indices were flattish a day before Budget 2023 but India VIX eased 4.71 per cent. Sensex and Nifty gained 1.4 per cent each, a day before Budget 2022 with India VIX surging 6.08 per cent.

The indices rose in the day before Budget in four out of the eight instances with Nirmala Sitharaman as Finance Minister.  

"India VIX has typically cooled off sharply post Budget, indicating a reduction in uncertainty," said SBI Securities.

Nifty and Sensex are going into the Budget day, falling over 3 per cent each in January. SBI Securities said whenever Nifty or Sensex corrected by more than 3 per cent a month before the Budget, it was followed by a strong rebound across one-week, one-month and three-month periods post Budget.

Stock selection becomes extremely critical, especially in the small-cap segment, where outcomes can vary significantly, it warned.