A day after Urjit Patel's exit, former economic affairs secretary Shaktikanta Das has been named as the next RBI Governor.
A day after Urjit Patel’s exit, former economic affairs secretary Shaktikanta Das has been named as the next RBI Governor. The former IAS officer who is also a member of Fifteenth Finance Commission has been appointed in the position for a period of three years. Considering significant wild swings observed in the bourses today, on account of poll results in the five states, investors would be keenly watching the latest development.
The stock markets are likely to take positive cues out of timely appointment of new RBI Governor, Ashok Wadhwa of Ambit Capital told CNBC TV18. “..I think the most important thing that has happened is that resignation has been accepted of the previous governor, and new governor is in position. Business would be back to usual from tomorrow morning. I would like to believe that markets would start looking at how companies are performing”, he added.
At the end of the day, fundamental reason on which markets depend is performance of companies, he also said. However, global investors would carefully watch how the new Governor handles both autonomy and independence of RBI as it is of paramount importance.
Markets would put behind events of yesterday and look forward to what’s new monetary policy, or other policies, under the leadership of new Governor, Nilesh Shah of Envision Capital told CNBC TV18.
CLSA said that state elections results will likely increase fears of an unstable govt among retail investors and this could impact market inflows. Slowdown in flows could impact market multiples, it added.
Meanwhile, in a session replete with wild swings, the Sensex ended Tuesday’s session 190 points higher even as the Nifty 50 closed above the 10,550-mark closely tracking the state election outcome trends. The Sensex recovered 724 points from the day’s lows to end at 35,150.01, while Nifty 50 ended 60.70 points higher at 10,549.15.
The stock markets recouped sharp early losses by mid-morning Tuesday as election results in three states were not as poor for the ruling party as some expected, but anxiety about the central bank governor’s resignation kept sentiment subdued. Markets initially plunged in reaction to Reserve Bank of India Governor Urjit Patel’s unexpected resignation late on Monday, which shocked many investors. “Patel’s resignation bodes poorly for macroeconomic and financial stability in India,” Fitch Solutions Macro Research, a unit of Fitch Group, had said in a note on Tuesday.