Crisis in Greece leads to fall in domestic markets

RSTV Bureau

Indian_ currencyThe global stock and currency markets has recorded worst hit in the wake of the ongoing debt crisis in Greece. And the trouble in the global markets has triggered downward slide in the domestic markets too. BSE Sensex tumbled over 535 points and the NSE Nifty slid below the 8,300 mark in opening trade on Monday on across-the-board selling by participants.

A weak trend in other Asian markets is believed to be the main reason behind the plunge as investor sentiment continues to be dampened by fears of a possible Greece default.

The 30-share gauge, which had lost 84.13 points in the previous session, hurtled down 535.87 points, or 1.92 per cent, to 27,275.97.

The crucial indices were trading in the negative terrain, led by realty, capital goods and banking, with losses up to 3.16 per cent. Also, the NSE Nifty slipped below the 8,300 mark by skidding 166.45 points, or 1.99 per cent, to 8,214.65.

However, Brokers said widespread selling by investors as well as funds, in line with a global sell-off on fears that Greece may default on a debt repayment and crash out of the euro zone, soured the mood.

Besides, weakness in the rupee, which turned lower by 24 paise to 63.88 against the dollar in early trade at the forex market, too negatively impacted sentiment, they said.

Apart from this, other Asian markets, Hong Kong’s Hang Seng was down 1.41 per cent while Japan’s Nikkei dropped 1.78 per cent in early trade on Monday.

The Dow Jones Industrial Average, however, ended 0.31 per cent higher in Friday’s trade.

Meanwhile, Indian rupee, extending losses for the fifth consecutive day, shed 24 paise to trade at 63.88 against the US dollar in early trade on Monday at the Interbank Foreign Exchange. The reason for this downfall is the continuing demand made by importers for the American currency.

Forex dealers said besides sustained demand for the dollar in view of the approaching month-end, weakness in the euro against the American currency overseas amid growing concerns of a Greece debt default and a possible euro zone exit weighed.

Furthermore, a lower opening in domestic equities kept up pressure on the rupee, they said.

Meanwhile, the Greek banks and the stock exchange will be shut on Monday after creditors refused to extend the country’s bailout and savers queued to withdraw cash, taking Athens’ standoff with the European Union(EU) and the International Monetary Fund(IMF) to a dangerous new level.

(With inputs from the PTI)