Budget 2025: PSU stocks tumble up to 9% on Budget Day, marking the sharpest decline since 2020
PSU stocks fell by over 9% on Saturday, witnessing their sharpest budget-day cuts of the past 7 annual financial plans. The BSE PSU index fell 2.7% with 57 scrips ending in the red. Against the expectation of a higher capital expenditure allocation, the government earmarked 11.2 lakh crore this time which did not go down well with the investors.
Among the worst losers were Ircon International, Mishra Dhatu Nigam, Rail Vikas Nigam (RVNL), Indian Rail Finance Corporation (IRFC) and Gujarat Gas which corrected between 9.3% and 6%.
Capex intensive sectors like defense, railway and power saw their stocks go down as the budget speech lacked big bang announcements.
On the last 7 budget days (since 2020) including this one, BSE PSU index has given negative returns on three occasions. Two other times when the 63-stock index fell by 0.08% and 0.50% were 2020 and 2023, respectively. The positive returns were recorded in 2021 (3.02%), 2022 (1.11%), February 1, 2024 (2.84%) and July 23, 2024 (0.67%).
In 2024 there were two budgets — interim budget of February and July full budget.
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