Raghuram Rajan's decision to go back to academics might spell short term negativity for the stock, currency and bond markets.
While the UK will possibly go into recession, the bigger fear is copycat referendums from other EU nations.
IT exporters were the top gainers amid a weak rupee along with select index heavyweights.
The hectic buying by domestic institutions, as also by some top-shot brokers in their proprietary accounts, was in sharp contrast to heavy selling of stocks by foreign portfolio investors
India's captains of industry said they were disappointed at the exit of Reserve Bank of India Governor Raghuram Rajan.
Calling RBI Governor Raghuram Rajan's exit a 'bad omen' for the Indian economy, eminent economists and former policymakers on Sunday said it will be seen by the world as India's non-approval to a policy against inflation and bad loans.
The rupee on Monday ended lower by 23 paise to close at an over two-week low of 67.31 against the US currency.
The report also described the RBI as an "extremely visionary, pragmatic and fairly independent" organisation throughout its history
Onno Ruhl said it is imperative to have a favourable global environment in addition to the domestic advantages.
'When the Brexit bomb goes off, the shrapnel will wound us.' 'We will in the time-honoured tradition apply band-aids all over.' 'Those who shout the loudest will get economic relief like interest rate reduction and debt restructuring.' 'Others will go on living lives of quiet despair,' says S Muralidharan.
'Here, after all, was a fine specimen of intelligence in the field that Adam Smith gave formal structure. And successful RR surely was as RBI chief.'
A two-year extension at the helm of the RBI still looks a real possibility
While stating that a strong government should be led by those who have expertise, motivation and integrity and can provide the needed public good, Rajan warned that "strong governments, may not, however, move in the right direction".
Rajan tells RBI colleagues he will be returning to academics
