Budget Blues: Why Indian Stock Market Sees Pre-Budget Gloom for 15 Years

• The Indian stock market consistently experiences a slowdown and sluggishness in the period leading up to the Union Budget, a trend observed for the past 15 years.
• Investors become cautious before major budget announcements, leading to a waiting period and often negative returns in the month prior to the budget.
• Uncertainty regarding tax changes, capex, subsidies, and fiscal deficit drives profit booking and short-term exits by foreign investors, putting pressure on the market.
• Post-budget, the market typically sees a gradual recovery as clarity emerges, and investors identify new opportunities, leading to stability.
• Long-term investors often benefit from pre-budget weakness, as the market shows stronger performance over 3 to 6 months, driven by economic policies and investments.

Why It Matters: Pre-budget market gloom is a consistent 15-year trend driven by uncertainty, offering long-term investors opportunities.