Rough ride for Indian stocks likely to continue even after Budget

The Sensex had a blistering advance last quarter -- even as data showed that the economy had plunged into recession -- led by record inflows from foreign investors

If history is a guide, the recent rough ride for Indian stocks will continue after Monday’s budget.

The S&P BSE Sensex index has climbed in the month after budget day on only two of the past seven years since Prime Minister Narendra Modi came to power, while falling or staying rangebound on other occasions. Risks are compounded in 2021 given stretched valuations.

“There are expectations that the government will keep aside fiscal prudence and open its pockets to spend more,” said Ajit Mishra, vice president of research at Mumbai-based Religare Broking Ltd. “Investors and businesses are pinning high hopes on