Moneycontrol Bureau
Indian market Monday may sway to the disappointment that Reserve Bank of India Governor Raghuram Rajan has no intention to serve second term. However, global market are positive with worries of Brexit easing a bit.
Asia markets are positive after several weekend polls showed the remain camp regained momentum ahead of a referendum vote to decide the UK's future within the European Union (EU). The Britons will vote to decide if the UK should leave or stay within the 28-member EU trade bloc on June 28.
The benchmark Nikkei 225 was up 2.62 percent as a relatively weaker yen took some pressure off stocks. Across the Korean Strait, the Kospi gained 1.16 percent. The International Monetary Fund (IMF) warned on Friday of "negative and substantial" net economic effects should the UK choose to leave.
The Japanese yen traded at 104.66 against the dollar, after pushing as high as 103.58, after the Bank of Japan decided to stand pat on monetary policy on Thursday. Meanwhile, back home speculation mounted on who will be the next RBI Governor amid political parties attacking the government and alleging RSS-BJP conspiracy for Raghuram Rajan's no to a second term, which the economists and former policymakers termed as a 'bad omen' for the Indian economy.
Industry and marketmen were also concerned about possible negative impact on the stocks, bonds and currency markets when they open, while regulator Sebi and stock exchanges beefed up their risk management and surveillance mechanism to address any eventuality.Credit Suisse says that the governor’s unexpected departure is negative for the currency as it raises uncertainty over the new monetary policy framework and managing potential volatility around events like FCNR redemption in Sep-Nov 2016. It expects the Indian currency to depreciate to 67.70 in three months and 71.0 in 12 months.
In asset class, crude gains as investors cautiously bought some riskier assets as anxiety eased about Britain's possible exit from the European Union.
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