Be prepared for action-packed trading tomorrow

The RBI governor Urjit Patel has stepped down from his post with immediate effect. The reason cited by him is personal. A statement issued by the RBI says, ‘On account of personal reasons, I have decided to step down from my current position effective immediately. It has been my privilege and honour to serve in the Reserve Bank of India in various capacities over the years. The support and hard work of the RBI staff, officers and management have been the proximate driver of the bank’s considerable accomplishments in recent years. I take this opportunity to express gratitude to my colleagues and directors of the RBI Central Board, and wish them all the best for the future.’

This will have an adverse impact on the markets tomorrow. Since the announcement came after the markets closed for trading, the impact of the news will be visible in tomorrow’s trading. If SGX Nifty is any indication, we could see more than 100 points gap-down opening. This may be further exacerbated if the election results go in favour of the Congress.

Nonetheless, we believe for a long-term investor, this is a good opportunity to enter his favourite stocks at lower prices. We have seen earlier that events such as ‘Brexit’ presented a good buying opportunity.