India’s stock market is exhibiting classic pre-budget weakness as the 2026-27 fiscal blueprint nears. Stats from 2010-2022 confirm: pre-week Nifty returns average -0.52%, with gains in merely 8 of 15 cases. Policy unpredictability reigns supreme, prompting hedges and exits.
D-day volatility averages 2.65% intraday, a far cry from calmer times. Recent form? Nifty fell in four of last five pre-budget months, capping with 2025’s January slide. Silver lining: 1.36% average post-budget surge.
Experts such as JM Financial’s Rahul Sharma foresee prudent spending to counter Trump tariffs, prioritizing infra, defense, rail investments for resilience. Industry lobbies for MSME lifelines, factory ramps, clean energy, AI, export aids—think GST speed-ups, infra logistics.
At 4.4% GDP, deficit paths to $5T economy via hiring drives, village demand, eco-sustainability. CARE eyes FY27 at 4.2-4.3%, borrowings 16-17 lakh crore gross.
Threats abound: premium pricing, FII dumps, AI corrections, global spats, currency wobbles, rollout hurdles. Fiscal misses invite cascades of sales, costlier debt, dry taps. Stay sidelined with cash, target defense, PSU banks strategically.