Should Dalal Street be worried about a Greek default?
By ET Bureau | 16 Jun, 2015, 06.01AM IST
Indian stocks were resilient on Monday even as global financial markets reeled under worries of a Greek default. Greece's stock index plunged 6%, while other European markets were down over 2%. Germany's main index was down 1.4%. US markets also opened 1% lower on Monday. In Asia, China's Shanghai Composite Index fell 2% and the Hang Seng declined 1.6%. Late last week, Eurozone officials conducted "worst-case" scenarios in the event of a Greek default after a key creditor International Monetary Fund (IMF) walked away from talks with Greece. The country faces a 1.6-billion-euro payment to the IMF by the month-end. In the midst of this global pessimism, the Sensex rose 0.6% and the Nifty gained 0.4% on Monday after industrial production data in April showed a slight revival. Fund managers, brokers and analysts said the recent market fall has discounted most of the pessimism around Greece but they do not rule out a correction in line with the global trends if Greece defaults.
BHARAT IYER MD & HEAD OF RESEARCH, JP MORGAN INDIA
The Indian stock market has been under pressure for quite some time and corrected meaningfully. On Monday, it reacted to the local issues with better than expected monsoon, fall in crude prices and so on. In case of any major selloff in Europe over the Greece issue, Indian market will follow the global trend.
MOTILAL OSWAL CMD, MOTILAL OSWAL FINANCIAL SERVICES
After the recent correction, Indian markets look attractive among emerging markets. The downside is limited from here onwards because money is pouring in from domestic investors. So, I believe the Greece impact will be limited for Indian stock market.
ANAND SHAH CHIEF INVESTMENT OFFICER, BNP PARIBAS MUTUAL FUND
Market generally react sharply when the events are sudden. However, the Greece issue has been talked about for many years and even if Greece actually defaults, the market may not react; and even if it reacts its impact will be very nominal.
SUNIL SINGHANIA CIO, RELIANCE MUTUAL FUND
Majority of global markets, including India, have already factored in the Greece event, which is nothing new. If Greece defaults, European indices and some of the overvalued emerging markets may decline for a day or two.