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Between-meeting surprise rate cuts are powerfully bullish — markets price in a full cut cycle. Housing Finance and Auto show strongest 1-month outperformance. Banking stocks typically rally 3-5% on surprise cuts.
Nifty 1 Day
+1.4%
Nifty 3 Days
+1.8%
Nifty 1 Week
+2.5%
Nifty 1 Month
+5.0%
RBI cut repo rate by 25bps between scheduled meetings on Jan 15, 2015 — a surprise move. This signalled the start of a rate cut cycle (6 cuts totaling 150bps by 2016). Nifty rallied 1.4% on the day and 5% over 1 month.
Mortgage rates fall — direct transmission
Asset quality buffer improves with lower rates
Auto loan EMI falls — demand boost
No significant laggards in the historical data.
RBI cut repo rate by 25bps between scheduled meetings on Jan 15, 2015 — a surprise move. This signalled the start of a rate cut cycle (6 cuts totaling 150bps by 2016). Nifty rallied 1.4% on the day and 5% over 1 month.
Historically, LIC Housing, HDFC Bank, Maruti Suzuki were among the strongest performers in the aftermath, based on real 1-week/1-month return data.
The Nifty 50 moved +2.5% in the following week and +5.0% over the following month.
Between-meeting surprise rate cuts are powerfully bullish — markets price in a full cut cycle. Housing Finance and Auto show strongest 1-month outperformance. Banking stocks typically rally 3-5% on surprise cuts.
Regime
bull
Repo Rate
7.75%
India VIX
13.5
Data Confidence
88%