Earlier this month, NSE replaced Shree Cement with Adani Enterprises in the benchmark Nifty 50. Domestic passive funds such as index funds and ETFs replicate their portfolios according to the stock weights on these indices. These funds must buy or sell stocks if their weight in the index is increased or reduced in the benchmark.
Monetary policy expectations impact stocks more than rate moves: RBI paper
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