The Indian stock market shall remain open for a special trading session on February 1, 2025, on the account of the Union Budget, as per the latest circulars issued by the National Stock Exchange (NSE) and BSE earlier this week. The Finance Minister Nirmala Sitharaman shall present the Union Budget for the financial year 2025-26 tomorrow.
The exchanges will be conducting a full trading session on the budget day, like normal days, following the regular market hour routine. The pre-opening trading session will remain open between 9.00 am to 9.15 am, followed by regular equity trading from 9.15 am until 3.30 pm. Commodity derivatives trading shall continue until 5.00 pm. However, the T+0 settlement session will remain suspended due to the settlement holiday.
The stock market was open on Saturdays for the Budget announcement in the past as well. It was open like any other regular trading day in 2020 and 2015 when the budget day was a Saturday. The decision ensures investors can react in real time to the budget announcement including fiscal policy measures, tax reforms, and sectoral allocations which have the potential to drive market movements.
Historically, the Indian stock market has exhibited significant volatility during the Union Budget speech. In 12 out of the last 14 instances, the Nifty 50 has shown intraday fluctuations within a 2-3 per cent range, said Sujit Modi, CIO, Share.(dot)Market.
"A common trend observed is that the implied volatility (IV) of options rises in the days leading up to the Budget but it declines sharply during the speech. Given this pattern, instead of adopting a directional strategy (delta-based approach), traders may find implied volatility (vega-based) strategies more profitable, capitalizing on the expected IV crush," Modi added.
The Union Budget is a key event for markets, which sets the economic agenda for the year ahead. With the government’s fiscal roadmap under scrutiny, market participants will parse the announcements for cues on growth, taxation, and sectoral incentives, shaping investment sentiment in the weeks to follow.
Not just the stock market, even the Multi Commodity Exchange of India Ltd (MCX) shall be conducting a special live trading session on Saturday, February 1, 2025, to make available the trading platform for market participants on account of presentation of the Union Budget, supporting their real-time risk management and hedging requirements.
MCX is India’s leading exchange in the commodity derivatives market segment. The timing for MCX operations shall remain as usual, that is, 9.00 am to 5.00 pm. However, Sunday shall remain a holiday for both MCX and stock markets as usual.