2026 budget could be the most impactful for stocks in years: UBS

The news: UBS suggests this year could be the most impactful budget for the equity market in recent history in its latest report.

The context: The report follows a media roundtable last week where UBS Australian equity strategist Richard Schellback said the proposed end to the capital gains discount and negative gearing would give Australian equities “a more competitive investment space”.

UBS noted that speculated changes to the 50% CGT discount could decrease the appeal of growth-focused investments relative to stocks that are driven by steady income streams.

In addition to this, UBS warned that the upcoming budget, combined with the RBA rate cycle, could create further headwinds for the real estate sector, raising concerns about how the negative wealth effect might impact domestic consumer-facing equities.