‘Markets are bound to be volatile, so…’: Zerodha’s Nithin Kamath warns ahead of Budget 2025

Zerodha co-founder Nithin Kamath has a word of caution ahead of Union Budget 2025-26, reminding traders that market volatility is inevitable. 

With the budget scheduled for February 1, Kamath urged investors to exercise restraint. Trading will be active on Saturday.

“So, the budget day is tomorrow, and yes, there is trading on a Saturday. Markets are bound to be volatile, so trade with caution,” he wrote. 

“If you are an active trader, I guess you should reduce trading size during event days. That is, if you cannot stop yourself from trading.”

Zerodha is allowing BTST (Buy Today, Sell Tomorrow) trades even on settlement holidays, he added. “Probably the only broker which will allow you to do BTST trades on days of settlement holiday, like tomorrow. So, there are no restrictions; you could buy something today and sell it tomorrow.”

The Union Budget has historically been a key driver of market fluctuations. Data from the last 25 years shows that only on eight occasions has the Indian stock market moved less than 1% on budget day.

In the previous budget session on February 1, 2024, volatility marked the day’s trading before indices closed slightly lower. The Sensex fell 106.81 points (0.15%) to 71,645.30, while the Nifty declined 28.25 points (0.13%) to 21,697.45. This was only the second time since 2018 that the market moved less than 1% on budget day. The other instance was in 2018, when indices closed with a marginal decline of 0.1%.

Other budget-day market movements varied significantly:

  • 2023: Sensex rose 0.27%, Nifty fell 0.26%.
  • 2022: Market surged 1.4%.
  • 2021: Indices saw a remarkable jump of 4.7%.
  • 2020: The market dropped 2.5%.
  • 2019: Indices fell 1.1%.

Over the past 25 years, the market has closed negative on budget day on 15 occasions, with the steepest decline of 5.8% recorded in 2009. On the flip side, two budget sessions saw gains exceeding 4%—in 2021 (+4.7%) and 2001 (+4.3%).

With Finance Minister Nirmala Sitharaman set to present the Union Budget 2025-26 on February 1 at 11 AM, investors are bracing for potential market swings.

While the budget’s impact on equity markets has softened over the years due to major policy reforms happening outside the budget cycle, analysts note that its influence remains strong.

Axis Securities highlighted that government spending slowed in H1FY25, with inflation, extended monsoons, and credit conditions impacting corporate earnings. The upcoming budget is expected to reinforce the ‘Viksit Bharat’ vision for 2047, striking a balance between infrastructure investment and social reforms.





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