Greece crisis subdues investor sentiment; Sensex down 420 points

Caution prevailed in the Indian equity markets on Monday, as investors were anxious about the Greece crisis, a day ahead of a crucial deadline for the Mediterranean country to repay part of its debt to the International Monetary Fund (IMF).

With no hope of a settlement in sight, investor sentiment was affected and caused panic at a benchmark index of Indian equities market, the sensitive index (Sensex) of the Bombay Stock Exchange (BSE).

The S&P BSE Sensex fell by 420 points or 1.51 percent and was trading at 27,391.04 points during the mid-afternoon trade session on Monday. The Sensex had plunged by 602.65 points in the intra-day trade so far.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) was also trading deep in the red. It fell by 133 points or 1.59 percent at 8,248.05 points.

The 30-scrip S&P BSE Sensex, which opened at 27,451.07 points, was trading at 27,391.04 points (at 1.30 p.m.), down 420.80 points or 1.51 percent from its previous day's close at 27,811.84 points.

The Sensex touched a high of 27,451.07 points and a low of 27,209.19 points so far in the trade.

According to Angel Broking, Indian markets opened in the red tracking the SGX Nifty and global cues.

"The Greece issue has caused the downfall and the subdued sentiments globally. As there is no clarity on the 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, when Greece has to repay part of its debt to the IMF.

On June 4, Greece had 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," 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.

During Monday's intra-day trade so far, all 12 sector-based indices of the S&P BSE were in the red.

Heavy selling pressure was seen in banking, automobile, healthcare, capital goods, information technology (IT), consumer durables, metal, technology, entertainment and media (TECK), oil and gas and realty sectors.

The S&P BSE banking index plunged by 486.08 points, followed by the automobile index which plummet by 383.32 points, healthcare index crashed by 304.27 points, capital goods index receded by 298.98 points and information technology (IT) fell by 247.06 points.

The S&P BSE consumer durables index declined by 233.46 points, metal index decreased by 176.56 points, technology, entertainment and media (TECK) index edged-lower by 122.09 points, oil and gas index fell by 101.88 points and realty index was down by 38.98 points.