Suspense crime, Digital Desk : As investors worldwide hold their breath for the US Federal Reserve’s latest policy decision, a fascinating historical pattern offers a calming perspective for the Indian market. An analysis of past data reveals that the Nifty 50 index tends to perform well in the aftermath of the Fed’s announcement, regardless of the specific outcome.

The key reason isn’t whether the Fed’s stance is aggressive (“hawkish”) or accommodative (“dovish”). Instead, it’s about the removal of uncertainty. The market dislikes suspense, and the Federal Open Market Committee (FOMC) meeting’s conclusion provides the clarity investors crave, often triggering a “relief rally.”

The numbers back up this trend. Historically, on the trading day immediately following an FOMC announcement, the Nifty 50 has delivered an average gain of 0.3 percent. This is significantly higher than the average daily gain of 0.05 percent on all other days. Furthermore, the market has ended in positive territory on 60 percent of these post-Fed sessions.

This positive bias isn’t just a one-day phenomenon. The analysis shows that the trend of outperformance continues over the one-week and one-month periods following the Fed’s decision.

In essence, the Fed’s announcement, whatever it may be, removes a major global overhang from the market’s path. While Wall Street reacts to the specifics of interest rate projections and the “dot plot,” Dalal Street often just breathes a sigh of relief that the event is over.

While past performance is no guarantee of future results, this historical tendency suggests that the conclusion of the FOMC meeting often clears the air, allowing the Indian market to resume its trajectory based on domestic factors.

Read More: Fed Decision Day: Why Indian Markets Historically Rise After the Suspense Ends