InvestorQ : Even though the Indian economy is faring badly after the Union Budget was announced, stock market continues to perform well. How so?
shrinidhi Rajan made post
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Even though the Indian economy is faring badly after the Union Budget was announced, stock market continues to perform well. How so?

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Riya Dwivedi answered.
2 years ago
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First of all, it is common for the stock market to show a lot of movement when the budget is announced and because of that, SENSEX and NIFTY marched positively. However, if you look at the sector-wise announcement of the budget, it has its impact on many sectors. For example, the vehicle scrapping policy announced by the government has created better opportunities for the automobile sector which in turn caused auto sector stocks to rise. Similarly, the proposal for 100% FDI in the insurance sector turned out to be positive for the insurance sector and hence it showed positive signs on the budget day.

If you look at the overall result of the budget, it is positive indeed. However, some sectors have shown negative signs after the budget as there were not any major announcements covering them, so sheer disappointment. Even though the GDP is minus for now, this Union Budget has concrete plans to bring it back on track as soon as possible. Looking at the plans to bring back the GDP and economy on track, the stock market reacted positively to the budget.

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