Benchmark stock indices, Sensex and Nifty, fell on Friday as investors reacted ahead of the Union Budget 2026, scheduled for February 1. At the same time, the India VIX, a measure of market volatility also called the “fear gauge,” rose sharply, indicating increased uncertainty in the market.
Historical data since 2014 shows that Sensex and Nifty have delivered positive returns in nine out of 15 occasions, including during interim budgets. However, the India VIX tends to show significant spikes just before the budget day, reflecting investor caution and nervousness.
Market analysts say that such movements are common before the budget as investors try to predict the government’s policies on taxes, spending, and economic reforms. They watch for measures that may affect corporate profits, sectors like banking, infrastructure, and manufacturing, and the overall economy.
Despite the short-term volatility, experts suggest that long-term investors should focus on fundamentals and not get influenced by temporary market swings ahead of the budget.
The Union Budget 2026 is expected to set the tone for the Indian economy, and markets are likely to react once the details are announced.