February 1, 2026, will be a landmark day for the Indian stock market. Finance Minister Nirmala Sitharaman is set to present her 9th consecutive Union Budget, a historical achievement. For the first time since 2000, the Budget will fall on a Sunday, with markets remaining open for trading.
Investors and traders are now asking: How has the market historically reacted around Budget Day? Should one anticipate volatility on the day itself, or are the real opportunities found in the days that follow?
Using 15 years of Nifty 50 data, we analyse trends before, during, and after the Union Budget.
Budget Day: Overrated or Misunderstood?
Common wisdom suggests that Union Budget Day triggers the largest market movement. Historical data, however, paints a different picture:
Average Budget Day move (Nifty 50): 0.19%
Average intraday range: 2.65%
This shows that while the market swings significantly throughout the day, it often closes flat or with minor net change. In other words, intraday volatility is high, but the net effect is small.
Experts note that ‘smart money’ tends to wait for policy clarity rather than chasing headlines. Budget day movements are often noise rather than reliable signals.
The week leading up to the budget often sees caution dominating investor behaviour:
One week before the budget: Average Nifty return of -0.52%. Positive pre-budget returns occurred in only 8 out of 15 years.
January performance: In 4 of the last 5 years, January has delivered negative returns, reflecting pre-budget uncertainty and profit-booking.
Technically, analysts identify support around 24,850 and resistance near 25,250 for Nifty, with profit-booking often prevailing until policy details become clear.
Post-Budget Rally: Where Real Opportunities Lie
Historical data shows that the week following the Budget day typically offers the best returns:
Average post-budget week gain: 1.36%
Once uncertainty clears and policy announcements are understood, the market tends to follow a more defined direction. This pattern often contradicts the old adage ‘Buy on rumours, sell on news’, as markets may dip initially and rally after the Budget is announced.
9th consecutive budget by Sitharaman, approaching the record of 10 budgets presented by former Prime Minister Morarji Desai (non-consecutive).
First Sunday session since 2000: Markets will operate from 9:15 AM to 3:30 PM.
Historically, weekend-adjacent budgets see lower liquidity, with trading volumes around 85% of normal weekdays, and average returns of -0.66%, weaker than the typical +0.45% gain on regular days.
This Sunday session, however, allows the market to react immediately to announcements, potentially influencing intraday volatility and investor strategy.
Distinct Insights Table: Budget 2026 vs Typical Budget Day
Metric
Typical Budget Day
Budget 2026 (Sunday)
Market Open Hours
9:15 AM – 3:30 PM (Weekday)
9:15 AM – 3:30 PM (Sunday)
Average Intraday Swing
2.65%
Likely similar, volatility expected
Average Close Change
0.19%
TBD, historical pattern suggests minor net change
Liquidity
Normal weekday levels
~85% of weekday trading
Historical Pre-Budget Trend
Slight dip (-0.52%)
Pre-budget caution expected
Post-Budget Rally
+1.36% (average week)
Likely similar if clarity emerges
The above table provides a snapshot of expected dynamics for Union Budget 2026, distinct from historical charts or 15-year detailed returns.
Key Takeaways
Budget Day movements are often muted: Average change of just 0.19%, despite high intraday swings.
Pre-budget dip can offer opportunities: Historical averages show -0.52% returns in the week leading up to the Union Budget.
Post-budget clarity drives returns: Markets tend to rally after policy details emerge, with average gains of 1.36% in the following week.
Sunday session introduces new dynamics: Lower historical liquidity may influence intraday trading patterns.
Patience and post-budget clarity are more reliable than chasing intraday volatility. Investors who wait for the market to digest policy announcements historically enjoy stronger and more predictable returns.
*The article is for information purposes only. This is not investment advice.
