New Delhi, Jan 22 : History suggests that the Union Budget's influence on short-term market performance is declining, foreign brokerage, Morgan Stanley said in a report. Volatility has risen since 2019 and hit an 11-year high in 2022. Expectations as measured by pre-budget equity market performance are important in determining what the market does immediately after the budget. The market falls on two of three occasions in the 30 days post the budget. The probability of such a fall rises to 80 per cent if the market has risen in the 30 days preceding the budget. Only twice in 30 years has the market been up both pre and post the budget, Morgan Stanley said. This year, India is tracking lower on an absolute basis and relative basis so far in January and, if this trend persists to budget day, the odds are stacked up for a positive surprise. A hike in the effective long-term capital gains tax on equities either via lengthening of the holding period from 12 months to 2 or 3 years to qualify for long term capital, or an increase in the tax rate from 10 per cent to 15 per cent could be a dampener for stocks, especially in the broad market, the report said. While post budget performance is harder to predict, the one thing that seems more certain is that volatility on budget day will be high even as this volatility has been declining over the past three decades. Morgan Stanley expects the budget to focus on gradual fiscal consolidation, providing a credible path for fiscal deficit reduction in F24 and reiterate the medium term road-map to lower central government deficit to 4.5 per cent of GDP; continuing to favour investment-driven growth with a push for both public and private capex, and focus on improving the ease of living, we expect overall focus to be on improving job creation, access to infrastructure and availability of amenities. The impact of the budget on the market has been on a secular decline albeit actual performance is a function of pre-budge expectations (measured by market performance ahead of the budget). Market participants still need to negotiate volatility. Factors that will likely have maximum impact include a credible fiscal deficit target, the government's spending plans vs. fiscal consolidation, and changes to long-term capital gains tax. /IANS