Mkts approach budget with justified caution

The Union budget, the annual unveiling of India's fiscal road map, is always met with a flurry of anticipation.

- Abhinaba Saha

MUMBAI: Yet, despite widespread excitement, markets approach the event with tempered expectations. That caution is often justified.

The median returns for all but two sectors have been negative in the month preceding the budget, revealed a Mint analysis of 17 key sectoral indices on the BSE over the past 20 budgets (including interim budgets in election years).

Real estate suffered the most, with a near 6% median decline during the period. The oil and gas, and power sectors fell 4.3% each. And the pre-budget market downturn is frequently reflected in wider market performance.

On average, sectoral indices fell in about 65% of the 20 budgets announced since 2009 in the month preceding the event. Even the benchmark Sensex rose ahead of the budget in only five of those instances.