Analyzing The Impact of the Union Budget on Sectoral Indices in the National Stock Exchange

Abstract

The Union Budget of India is an important economic policy announcement that can significantly influence investor expectations, market sentiment, and the performance of different sectors in the stock market. This study analyzes the impact of the Union Budget on selected sectoral indices listed on the National Stock Exchange (NSE). The study focuses on examining the movement and volatility of sectoral indices before and after the announcement of the Union Budget to identify whether the budget has a significant effect on sector-specific stock market performance. Historical market data relating to selected NSE sectoral indices will be analyzed using descriptive statistics, percentage changes, returns, and event-study techniques. The study also evaluates differences in the responses of sectors such as banking, financial services, information technology, pharmaceuticals, automobiles, and consumerrelated industries. The findings are expected to provide insights into how fiscal policies, taxation measures, government expenditure, infrastructure initiatives, and sector-specific announcements influence investor behavior and market reactions. The study will be useful to investors, financial analysts, policymakers, and researchers in understanding the relationship between government budget announcements and sectoral stock market performance.