Union Budget 2026-27: Market Trends and Expectations
As the government gears up to present the Union Budget 2026-27, historical data from 2010-2022 indicates a common trend in the market dynamics leading up to and following the budget announcement. Market analysts have observed that markets often exhibit a downward trend before the budget due to apprehensions about potential policy changes. However, post-budget rebounds are frequent, with an average gain of 1.36% in the week following the budget.
The pre-budget period is marked by increased volatility, with an average intraday trading range of 2.65% on the budget day itself. This heightened volatility contributes to the market’s cautious stance leading up to the budget announcement.
Looking back over the past 15 years, data reveals that the Nifty index has recorded a negative average return of -0.52% one week before the budget, with the index closing higher only on 8 occasions during this period. This trend aligns with the broader market behavior, where the Nifty has posted negative returns in the month preceding the budget in four out of the last five years, including a decline in January 2025.
Rahul Sharma, Director, Head – Technical and Derivative Research at JM Financial Services Ltd., highlighted that expectations for the Union Budget 2026 revolve around striking a balance between fiscal prudence and growth stimulus in the face of global challenges such as US tariffs imposed under President Donald Trump’s administration.
