Stock Market Update: The first budget of Modi 3.0 for the financial year 2024-25 is going to be presented in the third week of July. Even before the budget is presented, the stock market is continuously making new record highs. The Sensex is just a short distance away from the historical high of 80,000. While the Nifty is trading above 24,000 and is moving towards the figure of 25,000. A shocking study has come out before the budget is presented. According to this study, it has been observed that stock market investors reduce their exposure in the market a week before the budget is presented and re-enter the stock market a week after the budget is presented. And those who enter a day before the budget have to suffer huge losses.
How was the trend of stock market on budget day
Capitalmind Financial Services Private Limited, which is a SEBI registered portfolio manager, has studied the movement of the stock market during the budget in 24 years. According to this report, since the year 2000, CNX500 has given a median return of -0.1 percent during 24 budget days. According to this study, in the last 24 years, the highest return was received by investors on the day of the budget presented on 1 February 2021, which was 4.1 percent. Whereas the biggest loss was suffered by investors on the day of the budget presented on 6 July 2009. There was a loss of -5.4 percent on this day.
Enter the market after the budget by investing
According to a study by CapitalMind Financial Services, the market movement a week before and a week after the budget is presented is very surprising. Investors reduce their exposure due to the fluctuations on the budget day because 63 percent of the time the return is negative. But after the end of this event, as soon as the volatility subsides, investors re-enter the market and during this period the return has been positive 62 percent of the time."text-align: justify;">Negative return on investment before the budget
According to this study, if an investor invests a day before the budget, then after a month there is a 54 percent chance that the investment will get negative returns. But if an investor increases the period of his investment, he gets positive returns in the next 2-3 years. Anup Vijaykumar, Investment and Head of Research, CapitalMind, said, according to our study, there is a lot of volatility in the market before and immediately after the budget. However, in the long term, the market movement depends on the basis of corporate earnings growth. He advised investors to avoid equity allocation based on expectations or announcements from the budget. Instead, one should go ahead with his investment plan keeping in mind his financial goals.
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