Urjit Patel resignation as RBI Governor impact on Nifty, rupee: Index to fall by 150-200 pts
Impact of RBI Governor resignation: The Indian forex and equity markets are likely to witness a deep cut and high volatility due to the impact of RBI Governor Urjit Patel's resignation.
Impact of RBI Governor resignation: The Indian forex and equity markets are likely to witness a deep cut and high volatility due to the impact of RBI Governor Urjit Patel's resignation. Nifty and Bank Nifty can go down by as much as 150-200 points and 500-700 points respectively, according to market experts. Citing personal reasons, the RBI governor resigned abruptly after a months-long tussle over policy with the government that raised concerns about the central bank's independence as a national election nears.
The already jittery investors are eyeing the stock markets with fear especially after exit polls showed that incumbent BJP will suffer setbacks in Madhya Pradesh, Rajasthan and Chhattisgarh. The counting for five state assembly elections started in the morning and will result will be declared later in day. Telangana and Mizoram results too will be announced then. The key stock exchanges had a gap-down opening on Tuesday, with the S&P BSE Sensex losing over 450 points as investors were spooked by the surprise resignation of RBI Governor Urjit Patel on Monday evening.
Madhya Pradesh is the key state and if Chief Minister Shivraj Singh Chouhan led BJP returns to power, it will boost the markets. The reason behind that is that the state being an economic powerhouse and the BJP-led NDA government at Centre under PM Narendra Modi too is seen as market friendly.
At 9.16 a.m., the Sensex traded at 34,502.62 points, lower by 457.10 points or 1.31 per cent from the previous close. It had opened at 34,584.13 against the previous close of 34,959.72 points on Monday.
The Nifty50 on the National Stock Exchange traded at 10,346.90 points, lower by 141.55 points or 1.35 per cent from the previous close. India`s rupee and bonds plunged following Patel`s unexpected resignation after market hours on Monday shocked investors. The rupee came off earlier lows at 72.1350 to the dollar after opening at 72.46, but was sharply lower from its close of 71.35 on Monday.
The 10-year benchmark bond yield rose to 7.64 percent from 7.59 percent at the previous close.
Further, early trends of the Assembly election results in five states which showed a neck and neck fight between the Bharatiya Janata Party (BJP) and Congress in at least three also weighed on the sentiments.
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