The Indian stock market will remain open for a special trading session on Saturday, February 1, 2025, as the government presents the Union Budget for the financial year 2025-26. The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) have confirmed this in their latest circulars, ensuring that traders and investors can react in real time to the announcements made by Finance Minister Nirmala Sitharaman.
This move aligns with past instances where markets remained open on budget days, even when they fell on weekends, to provide immediate access to trading opportunities.
Why is the Stock Market Open on Budget Day?
The Union Budget is one of the most crucial economic events in the country. It outlines the government’s financial plans, tax policies, and spending priorities, which significantly impact stock markets. Investors closely monitor budget announcements for policy changes affecting industries, taxation, infrastructure, and fiscal deficits.
By keeping the market open, exchanges allow traders to respond instantly to policy changes, minimizing uncertainty and volatility that could arise from a delayed reaction.
Trading Timings and Session Details
As per the circulars issued by NSE and BSE, the stock market will operate during regular hours, with:
- Pre-opening session: 9:00 AM – 9:15 AM
- Regular trading session: 9:15 AM – 3:30 PM
- Post-closing session: 3:40 PM – 4:00 PM
Both cash and derivatives segments will remain active. However, there will be no extended trading hours beyond the usual schedule.
Market Expectations from Union Budget 2025-26
With the presentation of the budget just hours away, market analysts and investors are eagerly awaiting announcements that could impact various sectors. Key expectations include:
1. Income Tax Reforms
There is speculation that the government may revise income tax slabs or provide relief to middle-class taxpayers to boost disposable income and consumption. Any significant changes in tax policies will directly influence sectors like consumer goods, automobiles, and real estate.
2. Infrastructure and Capital Expenditure Boost
The government is likely to increase spending on railways, roads, and energy projects to drive economic growth. Reports suggest that a higher railway budget is on the cards, focusing on high-speed rail networks and freight corridors. Infrastructure and construction stocks are expected to benefit from such moves.
3. Green Energy Push and Carbon Emission Targets
With India committed to reducing carbon emissions, the budget may introduce incentives for green energy projects and sustainable manufacturing. The steel industry, for example, is seeking financial support to transition to low-carbon production methods.
4. Fiscal Deficit and Government Borrowing
A key focus area will be fiscal discipline. Investors will closely watch the government’s fiscal deficit target and borrowing plans. A higher-than-expected borrowing program could impact bond yields and the banking sector.
How the Stock Market Reacts to Budget Announcements
Historically, the market has exhibited high volatility on budget days. Stock indices may witness sharp swings as traders react to policy measures.
Past Trends on Budget Days:
- In 2020, the Sensex fell by over 900 points after the budget due to disappointment over capital gains tax policies.
- In 2021, the market surged as the budget focused on infrastructure and healthcare spending.
- In 2023, a balanced budget led to a muted but stable market reaction.
Investors should be prepared for high intraday fluctuations, with sectors like banking, FMCG, infrastructure, and energy likely to be most affected.
Key Strategies for Investors on Budget Day
For those planning to trade or invest on February 1, 2025, here are some important tips:
- Avoid Panic Trading: Markets will be volatile. Avoid making impulsive decisions based on early reactions.
- Watch Key Sectors: Focus on infrastructure, banking, and consumer goods for potential policy-driven gains.
- Monitor Government Borrowing Plans: High fiscal deficits could impact interest rates and banking stocks.
- Consider a Long-Term Perspective: Instead of reacting to short-term volatility, assess the long-term impact of policies.
Conclusion
The special trading session on February 1, 2025, will be a crucial day for Indian stock markets as investors react to the Union Budget announcements. With expectations of tax cuts, infrastructure spending, and economic reforms, traders should stay informed and exercise caution while making investment decisions.
For the latest updates on the budget and market trends, check Times of India.
