Will market see turmoil during Budget presentation? Experts share tips for retail investors
Union Budget 2026: Union Finance Minister Nirmala Sitharaman will present the Union Budget for the financial year 2026-27 in Parliament today. From the stock markets to the middle class, all eyes are on the key announcements.
Today could turn out to be a rollercoaster ride for the stock market as Finance Minister Nirmala Sitharaman is all set to present the Union Budget 2026. The markets are already showing signs of heightened activity, with volatility rising in the Sensex and Nifty amid a clash between FII positioning and retail investor expectations. In several past budgets, even a single announcement has triggered sharp market reactions. For instance, the introduction of a tax on cryptocurrencies in the 2022 Budget led to a nearly 2,000-point fall in the market. Against this backdrop, the big question is: what should retail investors do?
Here are five important things that can help investors navigate the market today.
1. Avoid panic selling
The market experiences significant fluctuations on Budget Day, but experts advise against trading on short-term reactions. VK Vijayakumar of Geojit Investments said that long-term investors should stay on the sidelines, as Q3 results and the budget will lead to stock-specific movements. If tax relief is provided, the market will surge, but do not sell during a downturn. In previous years, a recovery has followed the budget.
2. Maintain a long-term focus
Budget announcements such as relief in LTCG tax (expected increase from Rs 1.25 lakh to Rs 2 lakh) or a capex push will be beneficial in the long run. Experts say that tax reforms will increase market participation, so stick with SIPs and mutual funds. Avoid impulsive decisions and check the fundamentals.
3. Diversify your portfolio
The budget will focus on infrastructure (expected Rs 12 lakh crore), EVs, and green energy, but don't put all your eggs in one basket. Experts at Equitymaster say that safety is paramount before diversification and balance. Increase your exposure to defensive sectors like FMCG, IT, and Pharma, which remain stable during volatility. 4. Keep an eye on sector-specific announcements.
4. Watch for sector-specific announcements
If income tax cuts are announced, consumer stocks like Maruti and Tata Motors will likely shine. Retail investors should focus on sector-specific expectations before the budget. A higher defense budget could boost stocks like HAL and BEL, but avoid trading based on rumors.
5. Adopt risk management
MNCL Group advises following the risk management rules, as volatility will be high during the live budget event. Set stop-losses, maintain cash reserves, and review your portfolio after the budget. Avoid impulsive decisions and focus on long-term goals.
Overall, the market may surprise on Budget Day, but experts advise staying calm and trusting the fundamentals. Retail investor participation has increased, so take advantage of this with smart planning.
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