Policy expectations affect stocks more than rate moves
Business Standard|April 29, 2024
Equity markets are impacted more by the expectations of future monetary policy than the policy rate surprises on the day of announcement of the policy by the Reserve Bank, said an analysis.
Policy expectations affect stocks more than rate moves

According to a working paper prepared by RBI officials, the regulatory and development measures which are announced along with the monetary policy too impact the stock markets. "...equity markets are affected more by the changes in the market's expectations of future monetary policy (path factor) than the policy rate surprise (target factor) which is in agreement with the conventional thinking that equity markets are forward-looking," the paper said.

This story is from the April 29, 2024 edition of Business Standard.

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This story is from the April 29, 2024 edition of Business Standard.

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