"There was a lot of faith among investors that the governor would continue in office and based on that they have made investment decisions. So the concern was that if investors were disappointed, you would see capital outflows taking place, the delta from no re-appointment is negative in the market," said Jahangir Aziz,
JPMorgan, hours before RBI Governor's announcement.
But the equity market may only see collateral damage. The biggest hit, experts believe, will be on the currency market, which is already bracing for some major risks in the coming months.
"If Rajan is not continuing, the biggest risk will be to the Indian bond and currency Markets," Christopher Wood said in the Fear and Greed report back in May.
The biggest issue would be the redemption of the Foreign Currency Non-Residential (FCNR) bonds issued by Governor Rajan back i ..