Why India’s annual budget is a powerful market force

IN MOST BIG economies the government’s budget plans seldom drive large movements in the stockmarket. Except in India. Bosses and investors parse the documents for clues about which industries or firms have gained favour and which have fallen out of it. Markets react accordingly.

In February 2008 the Mumbai bourse’s main index fell by 12% in five days after India’s then-rulers were perceived to have responded inadequately to the global financial crisis. This year’s budget came on February 1st, a Saturday. Stockmarkets held a special weekend session. Bosses and investors were glued to TV screens as the finance minister, Nirmala Sitharaman, recited the provisions—until, after a record two hours and 41 minutes, she was too exhausted to go on.