Markets make handsome gains post interim budgets

The recent interim budget for the year 2019-20 was presented on February 1, 2019. The stock market reacted positively and the BSE Sensex for that day closed with gains of more than 200 points. In this week too, Sensex has been going up and has gained by more than 500 points since the budget day. 

We have analysed how the Sensex has performed over the next three months immediately after the budget was presented every year. We have considered the data for the last 10 years. An interesting trend was seen in the data. In the last 10 years, two interim budgets were presented before the new government presented its first Union budget.



As we can see, Sensex has given the highest returns post the presentation of the interim budget. If this trend continues, one can expect Sensex to deliver double digit returns over the next 3-4 months. Also, out of the last 5 years’ returns, Sensex has given more than 10 per cent returns post the budget for three years (including FY2014-15) . 

From 2009-14, the Congress party was in power, while from 2014, the BJP has been in the saddle at the Centre till date. The recent interim budget was presented by the BJP government. The upcoming Lok Sabha elections in April-May 2019 would decide which party would form the government. It would be interesting to watch how the markets will react to this momentous event.