How Union Budget Impacts the Stock Market in India

The Union Budget plays a major role in shaping stock market sentiment in India. Investors closely watch budget announcements as they influence sector performance and overall market direction. This article explains how the budget impacts the stock market.

Market Reaction Before and After Budget

Stock markets often show volatility before the budget due to speculation. Post-budget movement depends on how announcements meet market expectations.

Sector-Wise Impact of Budget

• Banking and finance
• Infrastructure and capital goods
• Consumption-driven sectors

Why Some Stocks Rise While Others Fall

Tax benefits, government spending, and policy reforms affect sectors differently. Positive announcements may boost stocks, while unfavourable changes can lead to corrections.

Long-Term vs Short-Term Market Impact

Short-term market reactions are often emotional. Long-term trends depend on economic growth and policy execution.

Conclusion

The Union Budget significantly influences stock market movements. Understanding its impact helps investors avoid knee-jerk reactions.

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