Union Budget 2026: Market Trends and What History Tells Us
- CASHPARENCY
- 2 days ago
- 3 min read
All eyes are on Finance Minister Nirmala Sitharaman as she prepares to present the Union Budget 2026 on Sunday, February 1st. Investors, traders, and business leaders are waiting to see the government's economic plan for the financial year 2026-27.
Current Market Status
Just before the big announcement, the stock and bullion markets have been volatile and closed with a negative trend. Here is where the market stands right now:
Nifty 50: High: 25,370 | Low: 25,213
Sensex: High: 82,430 | Low: 81,941
Gold: ₹1,50,849 per 10 gm
Silver: ₹2,91,922 per kg
Recap: What Happened in the Previous Budget (2025)?
The last budget focused on growth and productivity. On that day, the market reaction was mixed—the Nifty dropped slightly (-0.11%), while the Sensex stayed almost flat (+0.01%).
Key Changes from the Last Budget:
Agriculture: The government launched schemes to boost crop production and help India become self-reliant in pulses (dals).
Small Businesses (MSMEs): New rules made it easier for small businesses to grow. A ₹10,000 crore fund was created to help startups and women entrepreneurs.
Infrastructure: There was a heavy focus on building public projects. The government also planned to raise money by utilizing existing assets.
Energy: The budget supported "green" energy, including solar, wind, and electric vehicle (EV) batteries.
Finance: Foreign investment limits in the insurance sector were raised to 100%. The KYC process for bank customers was also simplified.
Healthcare: Plans were made to set up cancer care centers in every district, and customs duties on 36 life-saving drugs were removed.
Tourism: To attract more visitors, the government promised to develop 50 tourist destinations and simplify e-visa rules.
History: How Markets Reacted to Past Budgets
The stock market is very sensitive to budget announcements. Here is a simple look at what happened in previous years:
2024 (Negative): Markets dropped about 1% because the government increased taxes on profits from stocks (Capital Gains Tax) and trading.
2023 (Mixed): The Sensex went up slightly, but the Nifty fell. The budget focused on strong government finances.
2022 (Positive): Markets went up. Investors liked the focus on 5G technology, digital currency, and infrastructure.
2021 (Very Positive): The Sensex jumped over 2,300 points! This was the best budget-day performance in 20 years, driven by spending on health and roads after the pandemic.
2020 (Crash): The market suffered a massive fall (Sensex down 2.43%) because investors were disappointed that there were no major tax cuts.
2019 (Mixed): The interim budget in February helped farmer stocks. However, the full budget in July caused a market drop due to higher taxes on the wealthy.
2018 (Weak): The market dipped slightly because the Long-Term Capital Gains (LTCG) tax was reintroduced.
2017 (Positive): The market rose almost 1.76%. Investors were happy about tax relief for the middle class and the budget date being moved to February 1st.
2016 (Negative): The market fell. Despite plans to help farmers, investors were unimpressed by the lack of tax changes.
2015 (Positive): The Sensex rose as the government cut corporate taxes and focused on rural income.
2014 (Volatile): Being an election year, the market reacted well to the interim budget but saw a small sell-off during the final budget in July.
2013 (Negative): The market fell 1.5% because the "Super-Rich Tax" was introduced for wealthy individuals and companies.
Conclusion: What to Watch For
The upcoming Budget 2026 is expected to continue supporting sectors like Infrastructure, Renewable Energy, FMCG (consumer goods), and Banking.
Investors should keep an eye on these industries. If the government announces favorable policies for these sectors, stocks related to them may perform well. However, as history shows, the market can be unpredictable, so it is wise to be cautious.
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