Budget day curse? Why markets have ended in red 15 times in the last 25 years

New Delhi: Historical stock market data on Union Budget days reveals a predominantly bearish trend, with Indian indices ending in negative territory for a majority of sessions over the last decade and throughout the 21st century. As the nation prepares for the February 1 fiscal announcement, investors are bracing for the characteristic volatility that has seen the benchmark Nifty 50 log a price swing of over 1% in 16 of the last 25 Budget Day sessions.

Long-Term Historical Bearishness

Analysis of market performance over the last ten years shows that equity markets have finished in the red during seven of those ten budget days. This includes a consecutive three-year streak of negative finishes in 2023, 2024, and 2025. This pattern of a negative market reaction is even more pronounced over a longer historical timeframe; since 2001, the market has delivered a negative close on 15 out of 25 budget occasions, suggesting that the event often triggers a "sell-on-news" sentiment among domestic and foreign investors.

Notable Extremes and Median Flatness

The historical record also highlights extreme single-day swings that have defined the market's modern experience. The steepest decline occurred in 2009, when the Nifty tumbled by 5.84% following concerns over a higher-than-expected fiscal deficit. Conversely, the most bullish response was recorded in 2021, when the market surged by 4.74% as investors cheered a growth-focused pivot toward increased capital expenditure. Despite these statistical outliers, the median return on Budget Day remains essentially flat, indicating that while the day is fraught with intraday movement, it often functions more as a generator of short-term noise than a guaranteed catalyst for a sustained rally.

Expert Insights on Market Reactions

Experts suggest that the consistent bearish leaning on Budget Day typically stems from high pre-event expectations and the pricing-in of rumoured tax benefits or sops. When the actual speech fails to exceed these heightened expectations or introduces new compliance measures, the market tends to correct. While the immediate reaction is often negative, market analysts note that directional clarity and long-term trends usually emerge only in the post-Budget phase once the fine print is fully digested by institutional players.