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Why Budgets no longer matter to the stock market


GST, off-Budget policy-making have halted the wild gyrations in Sensex
Even as all eyes are on the Finance Minister, as Nirmala Sitharaman prepares to present her maiden Budget, the stock market is quite indifferent to annual exercise. In fact, the Budget has not been a material event for stocks, for the past 10 years or so.

An analysis of the Sensex movement on and around the Budget day, since 2000, shows changes in the market benchmark have been muted and of late there has been no euphoric pre-Budget rallies.

This is in contrast to the the wild gyrations of the Sensex on the day of the Budget, a decade ago.

This could be due to various policy announcements made outside the Budget, the GST limiting any action on indirect taxes, and the many off-Budget items bringing down the relevance of the annual exercise for the market.

Budget day movement.......................BL