Pre Session- Rajan’s exit, Brexit worries set to hit Dalal Street
20/06/2016
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. Losses in the CNX Nifty Index Futures for June delivery which fell by 0.65 per cent or 53 points to 8,103.5 at 10:29 AM Singapore time also signal that Dalal Street may open lower today. Traders will also keep a close watch on the progress of the monsoon rains while fluctuating global oil prices and the movement of the rupee may also weigh on sentiment at domestic bourses this week. The 30-share Sensex shed 9.84 points last week to end at 26,625.91.
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.
20/06/2016
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. Losses in the CNX Nifty Index Futures for June delivery which fell by 0.65 per cent or 53 points to 8,103.5 at 10:29 AM Singapore time also signal that Dalal Street may open lower today. Traders will also keep a close watch on the progress of the monsoon rains while fluctuating global oil prices and the movement of the rupee may also weigh on sentiment at domestic bourses this week. The 30-share Sensex shed 9.84 points last week to end at 26,625.91.
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.
