Precedent shows that interim Budget will be largely a budget of 'intent', where the government outlines fiscal strategy if voted back into power, without announcing new spending or revenue commitments
The impact of the Union Budget on the equity markets has reduced notably over the past few years, with the government undertaking most of the reforms outside the purview of the Budget, says Pranav Haridasan, MD and CEO, Axis Securities
Other than providing the fiscal position and economic conditions, the interim Budget is not expected to stir any deep reactions from the stock markets investors in India. Any tax concession related to investments in capital markets may, of course, create a favourable condition. However, the monetary policy decisions of the US Federal Reserve and Reserve Bank of India are likely to have a bigger influence on equities.
The US Federal Reserve will be announcing the monetary policy decision late night in India time as the Federal Open Market Committee (FOMC) meeting is currently underway. The RBI’s monetary policy committee (MPC) will meet on February 6-8, just a week after Finance Minister Nirmala Sitharaman presents the interim Budget on February 1.