Has February 1 Budget date reversed Sensex sentiment from bearish to bullish?

The Narendra Modi government did away with the practice of presenting Union Budget on February 28 last year when Finance Minister Arun Jaitley read out his annual financial statement on February 1. It was the year when a separate Railway Budget was not presented, another break from 92-year-old practice.

It was also the first time in seven years that Sensex responded positively to Union Budget. Is the new February 1 Budget date proving lucky for Dalal Street?
Last year, Sensex registered a sharp rise of 486 points closing at three-month high of 28,142 after Arun Jaitley presented Union Budget on February 1.

It was a surprise as Sensex had been cautiously sensitive to Budget proposals and registered decline as a norm. A look at the performances of Sensex on Budget day shows a trend that markets have not loved it.
BEAR HAS RULED ON BUDGET DAYS
After responding positively in 2005 and 2006, Sensex registered a drop of almost nine per cent in 2007, when former Finance Minister P Chidambaram presented the Union Budget.
The declining trend was wrested momentarily in 2010, when the then Finance Minister Pranab Mukherjee presented the Union Budget. But, the Sensex rose only marginally by 0.86 per cent.
The damning trend at Sensex continued even after the change of government at the Centre. After two years of marginal decline, Sensex gave a rude shock to the Modi government's Budget in 2016. It registered a fall of 7.51 per cent on the Budget day.

FEBRUARY 1 TURNS SENSEX BULLISH?

In 2007, Sensex registered a fall of almost nine per cent on Budget day.
Sensex saw only one marginally positive rally on Budget days between 2007 and 2016.
On three occasions, Sensex registered a decline of over 7 per cent on Budget day.
Budget was presented on February 1 for the first time in 2017.
Sensex showed a rise of 5.81 per cent, first positive trend in seven years, on last year's Budget day.
Going into Budget 2018, Sensex has gained 6.5 per cent over the last month.

BULL RAGES ON FEBRUARY 1
Then the date of Budget presentation was changed and Sensex responded by zooming north with 5.81 per cent rise registering a total variation of 13.32 percentage point compared to its response to the previous Budget. This does not suggest that mere a change in date of Budget presentation caused Sensex turn bullish.
Stocks in financial and realty led the bullish rally on the Budget day last year. It came on the back of the budgetary proposals for infusing Rs 10,000 crore in public sector banks and maintaining the same long-term (LTCG) and short-term capital gains tax (STCG) rates.
A Business Today report says that on February 11, 2016, Sensex stood at 22,951. Since then, it has gained nearly 13,000 points that translates into a gain of 56 per cent. The Nifty has gained nearly 4,000 points or 57 per cent from 6,976 since 11 February 2016.
In the run up to the Union Budget 2018, Sensex has been bullish betraying almost no bearish sentiment except for January 25 performance when it took a break to catch some breaths after a great run for six days.

By January 23, Sensex registered a rise of 6.5 per cent over the past one month signaling that February 1 Budget was being awaited with positive intent by investors.

How Sensex has responded to Budget proposals over the years.