The Budget vibes this year seem oddly mixed from a market perspective.
On one hand, analysts are warning the rupee could weaken further toward ₹92+ after the Budget because there weren’t strong lures for foreign capital and global dollar strength is still a headwind.
At the same time, big institutions like Morgan Stanley see Budget 2026 as supportive of cyclical growth and a backdrop for ~10% nominal GDP growth in FY27, mainly driven by capex, infrastructure, and manufacturing incentives.
When you look at the market reaction - sharp sell-offs, bond yields adjusting, and risk assets under pressure- it doesn’t feel entirely aligned with that growth narrative yet.
So here’s the question that’s been on my mind:
Are markets pricing this Budget too cautiously (focusing on rupee weakness and lack of blockbuster reform), or are we missing how much cyclical and structural growth levers might actually matter over the next 6–12 months?
A couple of angles I’m curious about:
-
Does a weaker currency actually help exports and valuations in the medium term?
-
Or does currency pressure and foreign capital outflows outweigh the cyclical growth push?
-
And how do you think this will split between equities, bonds, and forex positioning?