Budget 2025 lacked a trigger? Zerodha's Nithin Kamath on why markets stayed indifferent

Zerodha founder Nithin Kamath termed Budget 2025 a “non-event” for the markets. Kamath, in a column in the Economic Times,  noted that while the budget did not introduce any major negatives, it also lacked a strong trigger for a market rally. 

Kamath believes corporate earnings will be the key driver for market sentiment going forward.

One of the budget’s key measures was an increase in the tax-free income limit to ₹12.75 lakh, including the standard deduction. While this provides relief for the middle class, Kamath noted that its impact on overall economic recovery depends on inflation trends and potential rate cuts by the Reserve Bank of India. 

“The hope is that the tax changes will free up some money for people to spend on consumption,” he wrote.

Kamath also acknowledged the expansion of credit guarantees for MSMEs and startups, calling it a positive move but not a game-changer. 

“MSMEs have a perennial challenge when it comes to accessing capital, and, hopefully, these help in shrinking the big credit gap these small companies have to grapple with.”

Midcap stocks saw a sharp decline in market capitalisation on Saturday following the announcement of the Union Budget for fiscal 2026 by Finance Minister Nirmala Sitharaman. 

The BSE Midcap 150 index recorded a significant loss of ₹46,103.04 crore in investor wealth, far exceeding the ₹739 crore loss suffered by large-cap companies. Among the biggest losers were Mazagon Dock Shipbuilders Ltd., Torrent Power Ltd., and Cummins Ltd. 

The downturn was attributed to sustained losses across the broader market, with primary markets also trading in the red. Over the past month, the BSE Midcap 150 index has fallen 6.93%, extending its decline on budget day. 

G Chokkalingam, Founder of Equinomics Research Pvt. Ltd., noted that the budget did not introduce any specific measures to support midcap stocks, resulting in continued selling pressure.