Headlines
Greece crisis hits Indian equity; Sensex falls 166 points
Mumbai, June 29
A barometer index of the
Indian equity markets suffered a massive fall during the day's trade,
partially recovered, and yet ended in the red as anxiety grew over the
outcome of the Greece debt crisis on Monday.
Just a day ahead of
the crucial deadline for Greece to repay part of its debt to the
International Monetary Fund (IMF), sentiments were subdued and markets
were panic-stricken.
The sensitive index (Sensex) of the Bombay
Stock Exchange (BSE) recovered from its initial plunge of about 602.65
points, only to close lower by more than 166 points.
The wider
50-scrip Nifty of the National Stock Exchange (NSE) also bore the brunt
of panic selling which was triggered by the Greek crisis.
Nifty closed the day's trade in the negative territory with a fall of 63 points or 0.75 percent at 8,318.40 points.
The
30-scrip S&P BSE Sensex, which opened at 27,451.07 points, closed
the day's trade at 27,645.15 points, down 166.69 points or 0.60 percent
from its previous day's close at 27,811.84 points.
The Sensex touched a high of 27,695.32 points and a low of 27,209.19 points in the intra-day trade.
According
to Angel Broking, as expected the Indian markets opened in the red
tracking the SGX Nifty, other Asian markets and global cues.
"The
Greece issue has caused the downfall and the subdued sentiments
globally. There is no clarity on whether the creditors will give more
time or the earlier debt payment deadline of June 30 remains," Dipen
Shah, head of the private client group research, Kotak Securities,
elaborated to IANS.
The Greek government has called for a referendum to let the people decide on the terms and conditions of another bailout.
However, the July 5 referendum will come after the June 30 deadline, by when Greece has to repay part of its debt to the IMF.
On June 4, Greece deferred a payment of 300 million euro that was due to the IMF.
The
Greek banking system is expected to collapse if a default takes place,
leaving the country at the mercy of the European Central Bank's
emergency funding.
"Apart from the Greece issue, we have had the
double taxation avoidance treaty (DTA) talks with Mauritius," said Anand
James, co-technical head for research with Geojit BNP Paribas.
"Other
triggers were the subdued Gulf Cooperation Council (GCC) markets
because of the increase in terror activity in the region and the general
anxiety related to the monsoon's performance during July, when it is
predicted to weaken," James said.
Chinese market added pressure
by cutting lending rates. China joined several major economies that have
been forced to follow easier monetary policies. It lowered key lending
rates by a 25 basis points.
This analysis underscores the
challenge of a struggling global economy. Despite this, reluctance of
the Reserve Bank of India on lowering lending rates, played on the minds
of the investors.
Meanwhile, the Indian government is
monitoring developments in Greece, but it does not have any concrete
plans to deal with impact of the crisis.
"This is a dynamic and
evolving situation. There is no firm plan that we can access. Nobody can
predict what the exact situation would be," Finance Secretary Rajiv
Mehrishi told reporters in New Delhi on Monday.
Indian industry
has also flagged concerns that Indian exports will be hit if Greece
defaults and situation develops into crisis for Europe.
"India's
merchandise exports do not look promising this year and the troubles in
Europe could only deteriorate the prospects," the Associated Chambers
of Commerce and Industry of India (Assocham) said in a statement here.
During Monday's intra-day trade, a majority of sector-based indices of the S&P BSE ended in the red.
Heavy
selling pressure was seen in automobile, healthcare, information
technology (IT), consumer durables, bank, metal, capital goods,
technology, entertainment and media (TECK), metal, oil and gas and
realty sectors.
The S&P BSE automobile index plunged by
257.99 points, followed by the healthcare index which plummeted by
202.80 points, IT index crashed by 182.10 points, consumer durables
index receded by 146.52 points and bank index fell by 144.03 points.
The
S&P BSE metal index edged lower by 123.54 points, TECK index
decreased by 84.30 points, capital goods index declined by 81.53 points,
oil and gas index fell by 60.21 points and realty index was down by
32.07 points.
However, the S&P BSE fast moving consumer goods (FMCG) index ended the day's trade up by 21.57 points.
The
major Sensex gainers in Monday's trade were: Hindustan Unilever, up
1.54 percent at Rs.900.05; NTPC, up 0.80 points at Rs.138.75; ITC, up
0.53 percent at Rs.310.15; Larsen and Toubro (LT), up 0.44 percent at
Rs.1,787.80; and Bajaj Auto, up 0.41 percent at Rs.2,550.60.
The
major Sensex losers were: Hindalco Inds, down 3.55 percent at Rs.112.80;
State Bank of India (SBI), down 2.08 percent at Rs.259.55; Tata Motors,
down 2.07 percent at Rs.428.85; Sun Pharma, down 2.03 percent at
Rs.849.65; and Maruti Suzuki, down 1.93 percent at Rs.3,994.95.
Among
the Asian markets, Japan's Nikkei plummeted by 2.88 percent, China's
Shanghai Composite Index plunged by 3.29 percent. Hong Kong's Hang Seng
decreased by 2.61 percent.
In Europe, the London FTSE 100 index
receded by 1.78 percent, However, the French CAC 40 declined by 3.52
percent and Germany's DAX Index was lower by 3.23 percent at the closing
bell here.