Wondering what happened to your mutual funds on the budget day? While looking at the performance chart a day after the budget, it seems almost every equity mutual fund category was in the red. Debt mutual funds fared better as most of them made gains on the budget day.
Note, mutual funds update NAV data only at the end of the day. That is why you will have to wait for a day to find out their performance on the budget day. The BSE Sensex saw wild swings throughout the budget day. After gaining over 1,200 points by mid-session, the Sensex dropped by 2000 points and ended with a gain of 158 points at 59,708 points.
Most equity mutual fund categories lost 0.01-2.68% on the budget day. Only the technology fund category gained 0.67%. The market was down by 48.85 points after the budget, most equity mutual funds did reflect the trend. The stock market is likely to be under pressure because of the Adani saga that is keeping investors on the edge. Global economic concerns and recession fears are also likely to keep the market subdued. Even though inflationary worries and steep rate hikes are fading, the stock market is likely to be muted in the short term.
Equity mutual funds are likely to reflect the trend. Even though the Indian economy is resilient, it can’t be completely decoupled from global trends. The Adani episode may also impact the market sentiment in the near term.
Debt mutual funds, on the other hand, look to reward investors in 2023. The category gained around 0.02-0.51% on the budget day. Most mutual fund managers and advisors have been saying 2023 may prove a great year for debt mutual fund investors. Many things are falling in place for debt mutual funds. The budget revealed that the deficit is likely to be in check. The finance minister also announced government borrowing plans which were lower than expected. The consensus is that the budget will allow the RBI to go ahead with pause rate hikes and start rate cuts in future.