Stock market: Pre-Budget rally ahead? Chances have diminished, says Amit Goel of Pace 360

Investors hoping for a pre-Budget rally are in for a disappointment, with the benchmark indices Sensex and Nifty falling for the four straight sessions on Thursday. Analysts stayed optimistic on the domestic stock market but believed a pre-Budget rally looked unlikely.

Amit Goel Co-founder & Chief Global Strategist at Pace 360 said chances of a pre-Budget rally have somewhat diminished, but expects the forthcoming Budget to be relatively better than the recent ones. 

"Markets should look up before they go down more. I remain optimist. I do think that there could be a rally, post Budget. but chances of a pre-Budget rally have gone down significantly in the last few days, in my opinion, because the Indian markets have flattered to deceive," he said in an interview to Business Today.

Goel said the Indian governments have an old reputation of acting when they are in a corner. He assumption is that with foreign outflows and with US-India trade deal not happening, the government may want to do something to halt the FII exodus, to protect the rupee and to improve the sentiment in the absence of a US-India trade deal.

"So, probably pre-budget rally, I am not expecting one significantly, but post-Budget rally, I still think that there could be one," Goel said.

Ahead of Budget, NSO’s first estimate of FY26 GDP growth at 7.4 per cent implies that growth will moderate to 6.9 per cent in 2HFY26 against 8 per cent in H1, Emkay Global noted. 

"Nominal GDP growth at 8 per cent, while among the lowest in the series history (ex-Covid), has mildly surpassed budget estimates in value terms, thus allaying fears of fiscal slippage due to slower nominal growth. Importantly, these advance estimates are largely a pre-Budget exercise, based on extrapolated data and are thus prone to revisions," Emkay noted.

Gaurav Garg, Research Analyst at Lemonn said with tax revenues under pressure due to income-tax relief, the government’s major focus will be to fund rising needs, especially defence, renewable energy, and semiconductors, without breaking fiscal discipline.

"Instead of aggressive public spending, this year's Budget will likely rely on a recovery in consumption and private investment to drive growth, while keeping overall capex growth moderate. Defence, green energy, urban infrastructure, and manufacturing will see clear preference, while health, education, and traditional infrastructure get only incremental increases. Overall, Budget 2026 will emphasise disciplined spending, targeted capital allocation, and private-sector crowding,” he said.