Brokeragas unhappy over Rajan's decision

Indian as well as foreign brokerages have expressed sorrow at Raghuram Rajan’s decision of not continuing as Reserve Bank of India governor post September 4. They expect short blip to currency, bond and equity markets. Following is their views on Rajan’s exit related to equity markets:

Nomura : There is no obvious successor of a similar stature. News negative in near term but do not expect a lasting medium term impact. However, we do not believe policymakers can turn a blind eye to inflation.

UBS : Discussions with investors suggest this being a key event for them. Both investors and UBS have been positive on RBI Governor's efforts.

Kotak Institutional Equities : We are quite baffled by the development as continuity would have been preferable. Foreign portfolio investors liked the combination of the government and the Governor's replacement will take a few weeks unless government decides quickly

CLSA : Pro-growth policies may follow.We do not believe this is an end of the 'India story'. Immediate near-term impact is negative for rupee and equity markets. Continue to maintain our cautious view on the market owing to the mismatch between valuations and fundamentals

Credit Suisse : Expect rupee to depreciate to 67.70 in three months and 71.0 in one year. New appointment could mean higher likelihood of further rate cuts.

Bank of America Merrill Lynch : We expect rupee to depreciate to 68.5 in September. We continue to expect a final 25 basis cut on August 9 assuming the Met’s forecast on monsoon.

Citibank : Market focus is likely to shift back to improved macro fundamentals

Barclays : Business leaders in the recent past indicated their preference for Dr Rajan continuing for longer. The timing and manner in which the announcement was made came as a surprise. Rajan serving only for three years as RBI governor came in as a surprise. Believe that RBI will deliver another 25 bps repo rate cut in H2 2016

Prabhudas Lilladher: It is neither Rexit or Brexit but RainExit that should be worrying investors more as nearly 60 per cent of Indians still depend on agriculture & allied activities. With two successive monsoon failures, the need for a normal monsoon to kick-start rural demand cannot be under underestimated. We have already seen a 25 per cent deficiency in rains till 15th June 2016 although Indian Meteologial Department as well as private weather forecasters are unanimous that July-Aug-September will see copious rains and overall we would have an above-normal monsoon.