It is an irony that the biggest loss on Budget day for the Sensex, in terms of points, came in the same year which saw the index hit a record breaking upper circuit on the Election of the policy makers.
The Sensex ended with a loss of 869 points at 14,043 following the Union Budget announced this afternoon. The index had opened in the green and gained 184 points to touch a high of 15,098. However, the Union Budget did not go down well with the investors and the Sensex started slipping in noon trades. Thereafter the index crashed to a low of 13,959 - down 1,139 points from the day's high.
Earlier this year, the Sensex had hit its upper circuit twice within few hours of market opening after the UPA governement was declared the winner in the general elections. The index that day had closed at 14,273, up 2,011 points.
So far, this has been the biggest one day fall, in terms of points, for the Sensex on the day of the Union Budget. It had fallen 541 points after the 2007 Union Budget. The Interim Budget in February this year also saw the index drop 329 points to close at 9,305.
|
Budget Date
|
SENSEX
| |||
|
1-day before
|
1-week before
|
Budget Day
|
1-week after
| |
| 22-Jul-96 | (12.90) | 111.53 | 44.51 | (203.09) |
| 28-Feb-97 | 62.90 | (66.53) | 224.04 | 513.12 |
| 1-Jun-98 | (41.54) | (210.71) | (43.71) | (268.50) |
| 27-Feb-99 | (47.43) | (121.06) | 165.77 | 498.24 |
| 29-Feb-00 | 117.61 | (136.20) | (293.71) | (220.00) |
| 28-Feb-01 | (43.01) | 289.54 | 177.36 | (22.79) |
| 28-Feb-02 | (7.08) | 147.45 | (143.35) | (91.22) |
| 28-Feb-03 | 16.86 | (25.88) | 6.32 | (86.99) |
| 3-Feb-04 | (107.08) | 101.93 | (74.69) | 230.55 |
| 8-Jul-04 | 27.38 | 160.51 | (112.13) | (107.67) |
| 28-Feb-05 | (4.49) | (14.60) | 144.14 | 279.76 |
| 28-Feb-06 | 81.33 | 202.79 | 88.15 | 453.27 |
| 28-Feb-07 | (170.69) | (774.55) | (540.74) | (781.74) |
| 29-Feb-08 | (1.51) | 89.80 | (245.76) | (1848.96) |
| 16-Feb-09 | 168.91 | 333.88 | (329.29) | (791.53) |
| 6-Jul-09 | 254.56 | 148.31 |
(869.65)
|
-
|
Out of the last 16 times the Budget has been announced, the index has slipped nine times one day before the Budget was announced and an equal number of times on the day itself. More importantly, the index has slipped both on the budget day and one week after that, for the last three consecutive years.
While the biggest weekly fall following the Budget (in terms of points) came in February, 2008 when the index plunged 1,849 points, the highest it has gained on the day itself was more than a decade back. The Sensex had risen 224 points on February 28, 1997.
While history seems to be in favour of declines in Budget week, with seven cases showing the index slipping on both the Budget day and the week after, there hass been one sole exception where the index had dropped on the Budget day but gained in the week after. The trend is also in favour of a declines one day prior to the Budget, as is evident in more than half the instances from 1996. But this year saw the Sensex gain 255 points one day before the Budget, and a respectable 148 points in the week preceeding the event.
