Markets

Markets set to open higher

Priya Kansara Mumbai | Updated on January 17, 2018 Published on August 21, 2016

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Urjit Patel’s appointment as Reserve Bank Governor signals a continuity in the central bank’s policy, a development that the Indian equity market is likely to embrace when it opens on Monday, two days after the Centre made the announcement.

It is no secret that markets detest uncertainty and sudden change in policies; the Deputy Governor replacing his boss Raghuram Rajan thus ensures the continuity of policy and ideology that the bourses desire.

“Institutional investors, both domestic and foreign, would welcome Patel’s government’s appointment as successor to Raghuram Rajan. It signals a seamless continuity in the policies pursued by the RBI to conduct its monetary policy in an independent manner. Markets would strongly cheer the appointment,” said Ajay Bodke, CEO and Chief Portfolio Manager - PMS, Prabhudas Lilladher.

Nilesh Shah, Managing Director, Kotak Mahindra Asset Management Company, had a similar view. “Patel’s appointment provides continuity to monetary policy, especially inflation. It reassures both debt and equity market,” he said.

Patel’s appointment also sends a strong signal that the Centre is serious about fighting inflation, targeting higher economic growth, and ensuring the RBI’s independence. “If the government was not happy with Rajan, it would not have appointed Urjit Patel as Governor. His appointment shows that the government appreciates what Rajan has done,” said Abhinesh Vijayraj banking analyst at Spark Capital.

Published on August 21, 2016
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