Indian Stock markets and Budget jinx « Stockresearch52’s Blog

June 21, 2009...12:21 pm

Indian Stock markets and Budget jinx

Should you sell your stocks or buy more stocks on the eve of the Indian budget?

Investors are puzzled over the high level of intra day volatility over the fortnight.

The newly elected UPA government will be presenting the 2009 Budget on the 6^th July.

Investors in general expect a reform oriented budget giving thrust to infrastructure spending and growth oriented reforms to boost agricultural and industrial productivity and employment.

If we go by history on an average, sensex lost 2.1% one month after budget day since 1991 or 14 out of 18 times the index post negative. But could it be a different jinx this time after July 6?

By 19^th June, the overseas investors have pulled out nearly Rs 1,700 crore from the Indian stock markets, as per the latest data available with the market regulator Securities and Exchange Board of India (Sebi). Further Indian ADRs shed $5 bn in market valuation in one week.

However, domestic institutional investors continued their investment in the stocks of Indian companies and in Friday’s trade pumped in a net Rs 413.20 crore.