Pre-budget fall, post-budget rise

The stock market seems to expect little from the Budgets of the United Progressive Alliance (UPA) government. On eight of the past 10 occasions, including the current year, the Sensex has given negative returns during the Budget month. This pessimism seems to be growing with each passing year. In UPA’s second term, since July 2009, the Sensex has declined in the run-up to the Budget every year. The silver lining, however, is that the actual Budget proposals always seem to exceed Dalal Street’s expectations and the Sensex delivers positive returns by the end of the year. Will history repeat itself this year, too? (Click on graphic)