Mumbai: Markets took the announcement of RBI governor Raghuram Rajan quitting after his term ends in September, as a non-event and found cheer in the receding threat of Britain quitting the European Union (EU) and later the game changing increase in FDI in nine sectors.
Commerce minister Nirmala Sitharaman and later NITI Aayog CEO Amitabh Kant were at pains to tell the electronic media that the policy was not announced to deflect attention from Dr Rajan’s exit. The Sensex closed a robust 241.01 points up at 26,866.92 and the Nifty gained 68.30 points at 8,238.50.
Tuesday has even more to cheer with the government announcing its game changing FDI policy. Though the Sensex opened better than expected, down just 40 points, the Rajan exit story was forgotten by the afternoon as the threat of Britain leaving the EU was less than last week and gave a boost to the markets, said independent analyst Ambareesh Baliga. “With the FDI announcement in the afternoon, Dr Rajan was a stale story,” he said.
Mr. Vinod Nair, head of research, Geojit BNP Paribas Financial Services Ltd shared the same view saying “Though equity markets handled it (Rajan’s exit) well on Monday, bond and currency markets were tight. Strong cues that Britain is likely to maintain its status in Europe also helped the markets.”
