BSE, NSE in choppy trade as Raghuram Rajan announces exit

All eyes are on the domestic equity and money markets on Monday morning as Reserve Bank of India's Governor Raghuram Rajan announced his decision to depart from the post when his term comes to an end on September 4.

The BSE Sensex opened down 0.48% on Monday, and the NSE Nifty was down 0.57% on open but the downside seems to be largely limited as globally, indices were trading above the red line on Monday as Brexit fears ebbed to an extent.

In the first few minutes after open, BSE Sensex made up the losses and was trading at 26,598.64, down 27.27 or 0.10%. Nifty also recovered from the day's lower opening and was trading at 8153.80, down 16.40 or 0.20%.

The 30-share benchmark Sensex is in choppy trade, trading in the range of 0.30% under the red line and 0.30% above the red line.

In a letter to his colleagues at the central bank, Rajan said, "I was open to seeing these developments through, on due reflection, and after consultation with the government, I want to share with you that I will be returning to academia when my term as Governor ends on September 4, 2016. I will, of course, always be available to serve my country when needed." This has raised several questions about what led to his decision to leave the post and if it was, in fact, the politics and the propaganda against him in the last few weeks, that drove him to pen the letter.

A Reuters article says that Rajan was disgruntled by the selection committee that was set up last week to pick potential candidates for the Governor's job. "He felt it would belittle the position of the RBI governor if he had to appear before the committee," a senior official is quoted in the report.

Asian stocks gained as some fears that Britain would vote to leave the European Union abated on Monday, boosting a recovery in both sterling and investors' taste for risk assets.

Safe-haven assets and currencies like gold, government bonds retreated in the global markets.

The rupee nosedived 61 paise against the dollar to 67.69 on Monday morning as foreign investors fled their positions on Rajan's exit.

Bombay Stock Exchange - BSE

National Stock Exchange of India Ltd (NSE)