Analysis of the Impact of the Union Budget Announcements on the Indian Stock Market: A Fractal Perspective

TL;DR

This paper investigates how the 2024 Indian Union Budget announcement affected the NIFTY50 stock index, using fractal analysis to understand complex market fluctuations and comparing it with previous years.

Contribution

It introduces a novel fractal interpolation and dimensional analysis approach to study stock market reactions to budget announcements.

Findings

Budget announcement impacts are evident in abnormal returns.

Fractal analysis reveals complex market fluctuation patterns.

Comparison shows varying effects across different years.

Abstract

The stock market closely monitors macroeconomic policy announcements, such as annual budget events, due to their substantial influence on various economic participants. These events tend to impact the stock markets initially before affecting the real sector. Our study aims to analyze the effects of the budget on the Indian stock market, specifically focusing on the announcement for the year 2024. We will compare this with the years 2023, 2022, and 2020, assessing its impact on the NIFTY50 index using average abnormal return (AAR) and cumulative average abnormal return (CAAR) over a period of -15 and +15 days, including the budget day. This study utilizes an innovative approach involving the fractal interpolation function, paired with fractal dimensional analysis, to study the fluctuations arising from budget announcements. The fractal perspective on the data offers an effective framework for understanding complex variations.