Union Budget 2026: As India heads into the Union Budget for FY26–27, investors are once again preparing for heightened market volatility. Historically, the days leading up to the Budget have seen cautious sentiment, with markets reacting sharply to expectations around fiscal priorities, taxation, and government spending. The Union Budget remains one of the most influential policy events for Indian equities, often reshaping sectoral leadership and driving short- to medium-term market trends.
This year’s Budget is widely expected to maintain focus on capital expenditure, manufacturing-led growth and macroeconomic stability, even as global uncertainties around growth, geopolitics and interest rates persist. With valuations in certain pockets stretched and global cues mixed, portfolio positioning ahead of the Budget has become critical for investors looking to manage risk without missing long-term opportunities.
Balancing growth and protection before the Budget
Market experts broadly agree that diversification and balance are key themes going into Budget 2026. Rather than taking aggressive sectoral bets, analysts suggest maintaining exposure to stable large-cap stocks while complementing equity positions with defensive and alternative assets.
Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities, believes portfolios should focus on balance rather than directional calls ahead of the event. “We would recommend maintaining a balanced or hybrid portfolio,” Sheth said, adding that an ideal allocation could include 50 % in large-cap equities, 30 % in gold, 10 % in silver and 10 % in bonds, offering stability amid policy-driven volatility.
From a technical perspective, experts note that large caps continue to provide relative strength and trend stability during uncertain phases. Aakash Shah, Technical Research Analyst at Choice Equity Broking, said portfolios should remain core-heavy on large caps, while selectively adding mid-caps showing strong technical setups. He highlighted that 50–55 % exposure to large caps, 25–30 % to select mid-caps, and the remaining allocation in cash or defensive positions can help investors take advantage of volatility-driven corrections after the Budget.
Long-term allocation still matters
While short-term volatility around the Budget is inevitable, long-term asset allocation should not be overlooked. Experts suggest that investors align portfolios with structural growth themes while ensuring adequate downside protection.
Vikas Gupta, CEO and Chief Investment Strategist at OmniScience Capital, said diversified exposure remains essential in the current environment. “A portfolio with 75 % allocation to equities, including 20–25 % global equities, 20 % to fixed income, REITs and InvITs, and 5 % to other assets such as gold and silver offers a resilient framework for the year ahead,” Gupta noted.
Meanwhile, VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, emphasized prioritizing equity exposure with a tilt towards stability. He said investors should maintain higher weightage to equities, moderate exposure to gold, lower allocation to fixed income, and keep large caps as the core holding going into the Budget.
As Budget 2026 approaches, experts agree that staying diversified, avoiding knee-jerk reactions and focusing on long-term fundamentals can help investors navigate near-term volatility while remaining well positioned for opportunities emerging from policy announcements.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
