Budget Day Trading Session: The National Stock Exchange (NSE) has announced a special trading session for Saturday, February 1, 2025, coinciding with the presentation of the Union Budget. This move ensures that investors can react promptly to the budget announcements, which often have significant implications for various sectors of the economy.
Budget Day Trading Session: Trading Schedule for Budget Day
The NSE will adhere to its standard market timings, providing investors with ample opportunity to trade based on budget insights. Here’s a breakdown of the day’s schedule:
| Session | Timing |
|---|---|
| Pre-open Session | 9:00 AM – 9:08 AM |
| Normal Trading | 9:15 AM – 3:30 PM |
Budget Day Trading Session: Additional Market Sessions
To accommodate various trading needs, the NSE has outlined several specialized sessions:
| Session Type | Timing |
|---|---|
| Block Deal Session 1 | 8:45 AM – 9:00 AM |
| Special Pre-open (IPOs & Relisted Securities) | 9:00 AM – 9:45 AM |
| Call Auction Illiquid (6 hourly sessions) | 9:30 AM – 3:30 PM |
| Block Deal Session 2 | 2:05 PM – 2:20 PM |
| Post-Closing Session | 3:40 PM – 4:00 PM |
| Trade Modification Deadline | 4:15 PM |
It’s important to note that while February 1, 2025, is designated as a settlement holiday, the T0 session will not be operational.
Historical Context and Market Impact
This special trading session continues a tradition observed in previous years, such as February 1, 2020, and February 28, 2015, when markets remained open for budget presentations. The Union Budget, a pivotal event in India’s financial calendar, often triggers significant market movements as investors adjust their portfolios based on fiscal policies and economic forecasts.Finance Minister Nirmala Sitharaman will present her eighth consecutive budget, prepared by the Finance Ministry’s Department of Economic Affairs. The budget is expected to outline the government’s economic vision, expenditure plans, taxation policies, and welfare initiatives.
Recent Budget Market Reactions
Recent budget presentations have shown varied market responses:
- February 1, 2024 (Interim Budget): Nifty 50 closed 0.13% lower
- July 23, 2024 (Final Budget): Nifty 50 ended 0.12% down after volatile trading
These historical trends underscore the budget day’s potential for market volatility, attracting both long-term investors and short-term traders looking to capitalize on rapid price movements.As the 2025 Union Budget approaches, market participants are advised to stay informed and prepare for potential opportunities and risks that may arise from this significant economic event
Historical Market Performance on Union Budget Days:
The Indian stock market’s reaction to Union Budget presentations has shown diverse patterns over the years, characterized by significant volatility and mixed outcomes. Here’s an in-depth look at the key trends observed:
Overall Market Performance
- In the past three decades, the Sensex has demonstrated positive returns both 30 days before and after the Budget on only two occasions – 2006 and 2017.
- Budget days since 2000 have experienced substantial market fluctuations, with returns ranging from a high of 4.1% in 2021 to a low of -5.4% in 2009.
- During the period from 2014 to 2023, the Sensex closed higher on seven Budget days, while ending in negative territory on three occasions.
Pre-Budget and Post-Budget Market Behavior
- Since 2010, the average market return in the week preceding the Union Budget has been approximately -0.45%, indicating a trend of cautious selling.
- In contrast, the week following the Budget announcement has seen an average return of around 1.3% since 2010, suggesting a return of investor confidence once uncertainty dissipates.
- A notable pattern shows that the market tends to decline in two out of three instances in the 30 days following the Budget, with this probability increasing to 80% if there’s been a market rise in the 30 days leading up to the Budget..
Nifty 50 Performance Metrics
- Historical data reveals that the Nifty 50 typically closed within a -2% to +2% range on Budget days in 12 out of 14 sessions.
- Over the last 14 Budget sessions, the average movement of the Nifty 50 has been approximately 0.3%6.
- In the week following the Budget, the Nifty 50 has generally remained stable, showing an average decline of just 0.04%.
Sector-Specific Trends
- The FMCG index has shown resilience, rising seven times out of 10 with an average gain of about 0.79%2.
- Similarly, the Nifty Bank has displayed positive performance, advancing 7 out of 10 times with an average increase of around 0.17%.
- Conversely, the Nifty PSE and Nifty Energy indices have typically experienced notable declines in the lead-up to the Budget.
Remarkable Budget Day Performances
- Budget 2021 saw the BSE Sensex surge by 2,300 points (5%), marking its most impressive performance in two decades.
- In contrast, Budget 2020 witnessed the Sensex plummet by 988 points (2.43%), recording the largest Budget Day decline in 12 years.
- The 2017 Budget presentation resulted in a 1.76% rise in the Sensex, the highest Budget day gain observed between 2010 and 2019.
These trends underscore the profound impact of Budget announcements on market sentiment and performance. Investors keenly anticipate policy changes and economic measures outlined in the Budget, as these can significantly influence various sectors and the overall economic landscape.
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