Union Budget 2016: Will Sensex fall on D-Day? Here's what history suggests
Aprajita Sharma February 26, 2016
The nervous and heavily battered domestic equity market is eagerly waiting for the biggest business and economic event of the year - the Union Budget 2016-17.
An analysis on Sensex movement on Budget days in the past 10 years suggested that the market has fallen more often than rise on Budget days.
This holds true in seven out of 10 times.
In 2015, Sensex did end with gains of 141 points, but only after plunging over 700 points intraday. The market was closed on February, 28, 2015, the day of Budget announcement.
Soon, riding on the Reserve Bank of India's surprise rate cut the index hit its all-time high of 30,021 on March 4, 2015.
Prior to 2015, Sensex tumbled for three consecutive years from 2012 to 2014 and shed 1.18 per cent, 1.51 per cent and 0.28 per cent, respectively.
In 2007, the Sensex crashed 678 points even before Finance Minister P Chidambaram rose to present the budget, and ended at the then four-month low of 12,938.09 points, a net loss of 540.74 points, or 4.01 per cent.
As we head towards the big budget day, Dinesh Rohira, Founder & CEO of 5nance.com sees Sensex to test around 22,600 levels, in case finance minister Arun Jaitley fails to present a bold budget.
However, experts believe markets will not entirely be guided by Budget announcements this year. Global cues will also play a significant part, they said.
Below is what market analysts anticipate on the index level post Budget 2016:
Ambareesh Baliga, independent market analyst
As the expectations are muted, Baliga does not see any major crack in the markets post budget unless there are specific anti-market measures. He expects Nifty is likely to remain in range between 7,000 and 7,600 over the next two months.
R Sreesankar, Head - Insitutional Equities, Prabhudas Lilladher
With no near term political triggers except the passage of GST bill, the Nifty is likely to rule within trading range of 6,800-7,500 levels.
Dinesh Rohira, Founder & CEO of 5nance.com