Market Optimism Before Budget Announcement

In the lead-up to the recent Budget announcement, the Sensex experienced a significant uplift, gaining 741 points to reach 77,501. This surge was part of a broader optimism that added approximately 2,100 points over the last four sessions. However, since the last Budget on July 23, 2024, the index has seen a downturn of about 2,900 points or 3.6%.

Economic Survey Fuels Positive Sentiment

Satish Chandra Aluri of Lemonn, a tech-driven broking firm, highlighted the broad-based rally across sectors driven by Budget optimism. The Economic Survey presented in Parliament on Friday also played a crucial role in boosting market sentiment. Growth projections of 6.3-6.8% for FY26 aligned with expectations, and comments on increasing government capex spending further improved the outlook ahead of the Budget announcements.

Investor Wealth and Market Capitalization

Since the last Budget, investor wealth has decreased by about Rs 26.3 lakh crore, with BSE's market capitalization now standing at Rs 433 lakh crore. The mid and smallcap stocks have been particularly hard hit, with the BSE midcap index losing 7.3% and the smallcap index down by 5.4% since July 23, 2024.

Looking Ahead: Budget 2025 Challenges

Market players are keenly awaiting the Finance Minister's strategy to navigate the current domestic and global challenges. Sheetal Malpani of Tamohara Investment Managers emphasized the significance of Budget 2025, noting it comes at a time when the Indian economy is showing signs of weakness. The potential shifts in strategic policy directions under the Trump presidency in the largest economy add to the complexity of balancing growth stimulation with fiscal deficit maintenance.