Quantitative Researcher, MRM Research

Nico Rosti

Quantitative Researcher

MRM Research

Quantitative Research

Equity Derivatives

<ul>
<li>The <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index</a> rally may stop briefly, for 1 or 2 weeks. At the moment the index hast started a very mild pullback, after closing higher for 2 consecutive weeks.</li>
<li>Usually the rally does not last more than 3 weeks when this pattern is encountered although there has been occasions where it lasted 7 weeks.</li>
<li>Two scenarios lie ahead: (1) if this week closes higher, expect a near-term pullback; or (2) if it closes lower—possibly continuing into next week—the rally may resume afterward.</li>
</ul>


The NIFTY Index rally may stop briefly, for 1 or 2 weeks. At the moment the index hast started a very mild pullback, after closing higher for 2 consecutive weeks.
Usually the rally does not last more than 3 weeks when this pattern is encountered although there has been occasions where it lasted 7 weeks.
Two scenarios lie ahead: (1) if this week closes higher, expect a near-term pullback; or (2) if it closes lower—possibly continuing into next week—the rally may resume afterward.


NIFTY Index at a Crossroads: Two-Week Tactical Outlook

<ul>
<li>The <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index</a> rallied after RBI cuts key policy rate by 50 bps to 5.50%(but RBI governor said there is limited policy space from here).</li>
<li>Inflation forecast was cut to 3.7%; GDP growth forecast retained at 6.5, but Trump's trade tariffs and the prospect of a global economic slowdown are generating uncertainty.</li>
<li>The <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY</a> was already moving up in the last 2 days and accelerated sharply on Friday. But our model signals that the index is not overbought, it can go higher.
</li>
</ul>


The NIFTY Index rallied after RBI cuts key policy rate by 50 bps to 5.50%(but RBI governor said there is limited policy space from here).
Inflation forecast was cut to 3.7%; GDP growth forecast retained at 6.5, but Trump's trade tariffs and the prospect of a global economic slowdown are generating uncertainty.
The NIFTY was already moving up in the last 2 days and accelerated sharply on Friday. But our model signals that the index is not overbought, it can go higher.



Nifty 50 Tactical Outlook After RBI's Steep Rate Cut

Derivatives and Quantitative Strategist

Gaudenz Schneider

Event-Driven

<ul>
<li>
Context: On June 6, 2025, the Reserve Bank of India (RBI) unexpectedly cut interest rates by 50 basis points to 5.5%, double the anticipated 25 basis points.</li>
<li>
The <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY 50 Index</a> fluctuated initially but later stabilized at a 1.0% gain, while the <a href="https://www.smartkarma.com/entities/nse-nifty-bank-index" target="_blank" data-smartkarma-citation="entities:26811:1" rel="noopener">NSE Nifty Bank Index</a> rose 1.5%. At-the-money implied volatility changed little, while the skew rotated.</li>
<li>
This Insight explains the RBI’s bold policy move, market reactions, and limitations of predictive models in navigating central bank decisions.</li>
</ul>



Context: On June 6, 2025, the Reserve Bank of India (RBI) unexpectedly cut interest rates by 50 basis points to 5.5%, double the anticipated 25 basis points.

The NIFTY 50 Index fluctuated initially but later stabilized at a 1.0% gain, while the NSE Nifty Bank Index rose 1.5%. At-the-money implied volatility changed little, while the skew rotated.

This Insight explains the RBI’s bold policy move, market reactions, and limitations of predictive models in navigating central bank decisions.


India's Unexpected 0.5% Rate Cut: Friday’s Market Reaction Breakdown

<ul>
<li>The Reserve Bank of India (RBI) is set to announce a monetary policy decision on Friday, 6 June 2025.</li>
<li>
Market Expectations: The consensus anticipates a 25-basis-point rate cut, lowering the rate from currently 6.00% to 5.75%. Historically, one in four RBI rate decisions is a surprise to the market.</li>
<li>This Insight investigates past market behavior during comparable RBI policy announcements, unearthing a surprising statistic about how the Nifty 50 might react to June's decision, regardless of the outcome.</li>
</ul>


The Reserve Bank of India (RBI) is set to announce a monetary policy decision on Friday, 6 June 2025.

Market Expectations: The consensus anticipates a 25-basis-point rate cut, lowering the rate from currently 6.00% to 5.75%. Historically, one in four RBI rate decisions is a surprise to the market.
This Insight investigates past market behavior during comparable RBI policy announcements, unearthing a surprising statistic about how the Nifty 50 might react to June's decision, regardless of the outcome.


Nifty 50 and the RBI Rate Decision: History Has a Pattern

Equity Derivatives and Volatility Specialist, Clifton Derivatives

John Ley

Equity Derivatives and Volatility Specialist

Clifton Derivatives

Independent derivative and volatility research firm focusing on events/catalysts, earnings, relative value and cross asset volatility strategies.

<ul>
<li>Nifty had limited movement this week with the rally off the April low stalling out.</li>
<li>Elevated volatility metrics contrast with an otherwise quiet tape over the past week. We recommend taking some chips off the table, taking advantage of vol levels. </li>
<li>Nifty has given up about 1/2 its outperformance vs the SP500 over the past couple of weeks. </li>
</ul>


Nifty had limited movement this week with the rally off the April low stalling out.
Elevated volatility metrics contrast with an otherwise quiet tape over the past week. We recommend taking some chips off the table, taking advantage of vol levels. 
Nifty has given up about 1/2 its outperformance vs the SP500 over the past couple of weeks. 


Nifty Index Options Weekly (May 26 – 30): Rally Pauses, Vol Holds at Elevated Levels

India

The NIFTY 50 index is National Stock Exchange of India's benchmark stock market index for Indian equity market. Nifty is owned and managed by India Index Services and Products (IISL), which is a wholly owned subsidiary of the NSE Strategic Investment Corporation Limited.

NIFTY Index (NIFTY INDEX)

NIFTY Index at a Crossroads: Two-Week Tactical Outlook

NIFTY Index rally may pause briefly for 1-2 weeks as mild pullback could begin, after 2 consecutive weeks of gains. A potential rebound depends on...

Nico Rosti

Nifty 50 Tactical Outlook After RBI's Steep Rate Cut

RBI cut key rate by 50 bps, the NIFTY rallied; our model signals NIFTY 50 is not overbought, can rally higher in the next 2-4 weeks, even with...

Nico Rosti

India's Unexpected 0.5% Rate Cut: Friday’s Market Reaction Breakdown

RBI surprises with 50 bps rate cut, NIFTY 50 and NSE Nifty Bank rise. Insight on market reactions and implied volatility.

Gaudenz Schneider

Nifty 50 and the RBI Rate Decision: History Has a Pattern

On Friday, 10:00 am IST the RBI will release its monetary policy statement - live broadcast on the RBI's youtube channel. Both the Nifty 50 and the...

Gaudenz Schneider

Nifty Index Options Weekly (May 26 – 30): Rally Pauses, Vol Holds at Elevated Levels

Nifty's rally stalls, volatility remains high, we recommend reducing exposure while also taking advantage of elevtaed volatility.

John Ley

NIFTY Index at a Crossroads: Two-Week Tactical Outlook

​NIFTY Index rally may pause briefly for 1-2 weeks as mild pullback could begin, after 2 consecutive weeks of gains. A potential rebound depends on...

Nico Rosti

Nifty 50 Tactical Outlook After RBI's Steep Rate Cut

​RBI cut key rate by 50 bps, the NIFTY rallied; our model signals NIFTY 50 is not overbought, can rally higher in the next 2-4 weeks, even with...

Nico Rosti

India's Unexpected 0.5% Rate Cut: Friday’s Market Reaction Breakdown

​RBI surprises with 50 bps rate cut, NIFTY 50 and NSE Nifty Bank rise. Insight on market reactions and implied volatility.

Gaudenz Schneider

Nifty 50 and the RBI Rate Decision: History Has a Pattern

On Friday, 10:00 am IST the RBI will release its monetary policy statement - live broadcast on the RBI's youtube channel. Both the Nifty 50 and the...

Gaudenz Schneider

Nifty Index Options Weekly (May 26 – 30): Rally Pauses, Vol Holds at Elevated Levels

​Nifty's rally stalls, volatility remains high, we recommend reducing exposure while also taking advantage of elevtaed volatility.

John Ley

NIFTY Index rally may pause briefly for 1-2 weeks as mild pullback could begin, after 2 consecutive weeks of gains. A potential rebound depends on...

RBI cut key rate by 50 bps, the NIFTY rallied; our model signals NIFTY 50 is not overbought, can rally higher in the next 2-4 weeks, even with...

RBI surprises with 50 bps rate cut, NIFTY 50 and NSE Nifty Bank rise. Insight on market reactions and implied volatility.

Nifty's rally stalls, volatility remains high, we recommend reducing exposure while also taking advantage of elevtaed volatility.