Key domestic equity benchmark indices came down crashing in the opening trade Monday, with benchmark Sensex tumbling over 500 points amid knee-jerk reaction by investors over Greece inching closer towards a likely expulsion from the Euro zone after weekend talks between the country and its creditors failed to arrive at any solution.
The failure to reach a deal with creditors leaves Greece set to default on 1.6 billion euros ($1.76 billion) of loans from the International Monetary Fund that fall due on Tuesday. Athens must also repay billions of euros to the European Central Bank in the coming months, a Reuters report said.
Mirroring the weak Asian markets trend, the 30-share S&P BSE Sensex plunged to a low of 27,249.67, down 562 points from its close. At 9.50 am, the Sensex was quoted at 27,303.49, down 508.35 points, or 1.8 percent. The broader 50-stock CNX Nifty was at 8,225.70, down 155.40 points or 1.8 percent.
Market breadth was extremely weak with 1,377 stocks declining against just 232 stocks advancing on the BSE.
However, many believe the markets reaction is a short-term trend. Ashutosh Khajuria of Federal Bank told CNBC-TV18 that part of the ongoing Greece issues are already factored in by Indian currency markets and may not impact the rupee and bond yields in a big way.
"Now, if it depreciates a bit, maybe a percentage or so, maybe 50-60 paise from now over the next one week or so, I do not see there would be much of an intervention happening from RBI because that would mean something they would like to see looking into the trend, looking into the consecutive six months of exports falling etc," he told the TV channel.
Rakesh Arora of Macquarie too is of the opinion that Greece crisis is a good opportunity to buy into the Indian market as it consolidates before the next leg up.
The Indian markets' reaction is in line with other Asian indices such as Japan's Nikkie, which was down 1.8 percent at 20,337.34 and China's Hang Seng that dropped 2.4 percent to 26,034.42.
Jittery domestic investors shunned realty, banking and automobile shares the most even as other sectors, too, displayed weak trend.
Among the major laggards Tata Motors declined 3.5 percent to Rs 422.65, SBI eased 3.3 percent to Rs 256.20, Hindalco faltered 2.9 percent to Rs 113.60, Axis Bank fell 2.8 percent to Rs 549.55 and ICICI Bank lost 2.7 percent to Rs 302.90, HDFC Bank was down 2.6 percent at Rs 1,035.50.
In the realty space, Indiabulls Real Estate plunged 6.2 percent to Rs 54, DB Realty dropped 4.8 percent to Rs 60.10, Unitech declined 4.7 percent to Rs 7.69, HDIL eased 4.5 percent to Rs 89.40 and DLF was down 4 percent at Rs 115.25.
Updated Date: Jun 29, 2015 11:41:24 IST