Indian markets
Rajan’s exit, Brexit worries set to hit Dalal Street
Indian Indices:
Indian benchmark are likely to open
on a bearish note as the global cues look subdued with SGX Nifty trading 58.50
points lower.
The Indian equity benchmarks may
witness a gap down opening on Monday as Raghuram Rajan’s abrupt decision to
step down as the RBI governor following the end of his term in September may
sour risk taking appetite.
Rajan, who was instrumental in
helping tame down inflation and restoring macroeconomic stability, said that he
won’t seek an extension to his term and will be returning back to academics.
Rajan’s exit could spell volatility for equities and the rupee which may also
take a hit from heightened global economic uncertainty amidst fears that a
potential exit of the UK from the European Union may weaken the global economy.
The Brexit referendum slated on June
23, 2016 will decide whether the UK will break away from the European Union, an
event which could hurt capital flows to emerging markets.
Global Market:
Asian stocks were trading mostly higher with focus firmly on
Brexit referendum in the UK. A latest poll showed a swing in favour of Britain
remaining in the EU, as campaigning resumed after the murder of opposition
lawmaker Jo Cox.
China’s Shanghai Composite logged modest losses, Hang Seng rose
and Japan’s Nikkei 225 surged by over 2 per cent as the yen declined after the
country’s exports suffered an eighth straight drop in May.
On Friday, Wall Street succumbed to a renewed slide with benchmark
S&P 500 marking its second weekly decline and the biggest since April as
concerns over the world economy amidst Brexit fears and soft housing data hit
sentiment.
US housing starts fell 0.3 per cent to a 1.16 million annualized
rate in May, signaling a cooling housing market in the world’s biggest economy.
European shares rose on Friday, helped by a rebound in the
battered banking sector, with investors attributing the rebound partly to the
suspension of campaigning for Britain's EU referendum following the shooting of
a lawmaker.
Major Headlines of the day:
· RBI
Governor Raghuram Rajan decides not to seek reappointment
· Cipla
in pact with Russian firm for HIV, Hepatitis C drugs.
· Max
Life and HDFC Standard life begin due diligence for merger.
Trend in FII flows: The FIIs were net
buyers of Rs 31.96 Cr in the cash segment on FRIDAY while the DIIs were net
sellers of Rs -26.21 Cr, as per the provisional figures.
