Markets to make a somber start in a knee jerk reaction to Rajan’s decision

The Indian markets despite volatility had managed a positive close in last session. Today, the start of the crucial week is going to be bit somber despite positive regional cues, as Reserve Bank of India (RBI) Governor Raghuram Rajan has decided not to go for a second term and bow out in September. There will be knee-jerk reaction in the markets in early deals and the rupee movement will be closely watched, as it is the most to get impacted. However, traders will be getting some support with the report that quick progress of monsoon in last one-two days has taken the crucial weather system to many new regions and is expected to intensify in the days ahead. Meanwhile, the Finance Ministry expects the country's growth rate to climb to 8 percent in the current financial year on the back of above normal monsoon. The infra sector stocks will be in action, as Prime Minister Narendra Modi has set targets for key ministries that have to be delivered by end of the financial year to effect visible change on ground. There will be some buzz in the power PSUs, as Power, Coal, New and Renewable Energy Minister Piyush Goyal has said that his ministry will not reduce the government's stake in power sector PSUs below 51 per cent and has said that management and control of the PSUs should remain with the government.

The US markets made a negative close in last session as traders remained concerned about the referendum on whether Britain will remain in the European Union. The Asian markets have made mostly a positive start, as the crude strengthened for the second day. The gainers were led by the Japanese market which was up by over two percent as the yen fell for the first time in seven days.

Back home, a session after displaying a distressing performance, Indian benchmark indices managed a modestly positive close on Friday, as investors accumulated quality stocks at attractive levels. Sentiments got a boost after India's current account deficit (CAD) declined sharply to $0.3 billion (0.1% of Gross Domestic Product) in the fourth quarter of ended March 2016 (FY16) from $ 7.1 billion (1.3%), in third quarter ended December 2015, on account of lower trade gap.  Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Some support also came with Economic Affairs Secretary Shaktikanta Das’ statement that FDI inflows in the current fiscal will top 15.3 per cent rise in 2015-16 on the back of reforms and liberalisation of FDI norms. However, investors remained concern with the report that India's monsoon deficit has widened to 25% since the beginning of this month as rainfall in the past day was less than half of the normal level increasing the anxiety of farmers, although forecasters say that heavy showers are just a few days away. Meanwhile, sugar stocks declined after the government imposed 20% customs duty on sugar exports to boost domestic supply and ensure that traders don’t ship out sugar to take advantage of favourable international markets. On the other hand, Real estate stocks surged ahead of the Securities and Exchange Board of India (Sebi) board meeting on Friday to make further relaxations to rules governing real estate investment trusts (Reits). On the global front, Asian markets bounced back on Friday, as US consumer price data helped calm investor sentiment, however European markets, after getting positive start, slipped below neutral line in early deals. Back home, the markets regained its momentum in the final hour of trade and finished the day gaining over quarter a percent. Finally, the BSE Sensex surged 100.45 points or 0.38% to 26625.91, while the CNX Nifty rose 29.45 points or 0.36% to 8170.20.