NEW DELHI: With Rexit now a reality and Brexit a strong possibility, another event haunting analysts on Dalal Street are signs of a possible slowdown in the progress of monsoon.Raghuram Rajan over the weekend said he would return to academics at the end of his term at the Reserve Bank of India on September 4. This is bound to create some bit of volatility in equity, bond as well as currency markets “Rajan leaving the central bank will trigger some volatility for sure. But after the initial wobble in the currency, bond and equity markets, things should stabilise over time,” Ajay Bodke , CEO & Chief Portfolio Manager, Prabhudas Lilladher , told ETMarkets.com.The bigger worry according to me is not Rajan or even Britain referendum, but monsoon rains. Should there be a slowdown or ‘RainEXIT’, it could do more damage to our bond, equity as well as currency markets,” he said. India is predominantly an agriculture-based economy and a large part of the country gets more than 80 per cent of the annual rainfall during the four months i.e. June to September. After two drought years, markets are pricing in an above-normal monsoon this year.This has now started reflecting in stock valuations as well. Most of the consumption-based stocks have already rallied in anticipation of above-normal monsoon rains.Last year, the monsoon was deficient by 14 per cent, leading to a crippling drought in 302 of India’s 640 districts. In 2014, there was a 12 per cent shortfall in rains, said a report.For the first time in six years, the southwest monsoon changed its course to enter Maharashtra through Vidarbha , instead of Konkan, its usual entry point. The monsoon entered the state on Saturday after a 10-day delay.Concerns over the delay in monsoon rains or possibility of below-normal monsoon could put government’s plan of doubling rural income in a state of disarray.Things can get worse if monsoon fails to pick up pace soon. Should things go wrong, analysts can say goodbye to hopes of double-digit earnings growth in the second half of 2017. The risks are grave as 2016 could become the third year of below-normal monsoon.“Talking of risk factors, I think monsoon is a much more important variable for the performance of Indian equities over the next six months,” Bharat Iyer, JP Morgan India, said in an interview with ET Now “We have discounted an above-average monsoon right now, particularly in areas like financials, the NBFC pack or segments like consumer discretionary. If we do not get that monsoon, that is a bigger risk for the markets,” he said.The Nifty with an EPS estimate of Rs 455.4 is trading at a price-earnings (PER) multiple of 17.5 times one-year forward earnings. This is at a discount to the average 10-year PER of 18.1 times.