- Also known as High Cash flow
- During QE, the repo rates are cut, meaning, the lending rate from the central bank to the banks is slashed and which in turn is trickled down to the customer
- Lower/Affordable interest rates mean more cash flows into the economy, fuelling growth and hence move the market (usually a bull run is triggered in these scenarios)
- Mostly due to the fact that safe instruments like FDs lower their interest rates during this period and hence more money flows into Equities
- It also drives inflation eventually
- QE is done via
- Printing money by the Central Bank
- Bond sales
- Finance stocks in general do well during a QE period
- Private banks, Public sector banks, NBFCs, AMCs etc