Hedge your portfolio against Budget risk with these 4 strategies
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The Budget Day in India has conventionally always been a big event, and most of the time this day is put up for volatility in the market as the world waits to hear the government's fiscal policies and economic reforms. However, if one digs deeper into the past data, he shall be surprised to know that Budget day is pretty unremarkable for the biggest bourse in India, the Nifty Index, which has returned an average of 0.4% for the last eleven budgets. The statistic relies on the fact that there would be a fair punch in the market index itself, but sectors react differently, which opens opportunities for strategic hedging and investment. Sector Performance Analysis There are some sectors that have continuously done better on Budget Day. Most of the time, Nifty FMCG, banks, financial services, and private banks move northward after the budget announcements. The reasons could be their policies turn favorable or an increased expectation of c...