Shares of Indian companies with exposure to Europe faced selling pressure today amid worries over the Greek debt crisis.
Shares of Bharat Forge plunged 4.03 per cent, Tata Motors was down 2.07 per cent, Havells India went down by 1.66 per cent, Motherson Sumi Systems lost 1.32 per cent and Tata Steel fell by 0.79 per cent on the BSE.
IT stocks also faced selling with HCL Tech falling 2.78 per cent, Infosys lost 1.58 per cent, Wipro was down 1.23 per cent. Europe is the second biggest outsourcing market for the Indian IT services firms after the US.
“Certain stocks in IT, pharma and auto ancillaries having significant exposure to euro will underperform the market. Since Greece issue is well known for some time, it is unlikely to cause as much correction as the 2008 global crisis,” said Nilesh Shah, MD, Kotak Mutual Fund.
Tourism stocks likes Cox & Kings slumped 5.61 per cent, Thomas Cook was down 3.84 per cent.
Greece shut down its banking system, ordering lenders to stay closed for six days starting today to avoid a run on the country’s banks. The steps, a fateful climax to five years of debt crisis, puts Greece closer than it ever has been to an exit from the euro zone.
Greece early today imposed capital controls and closed banks until at least July 6 after Prime Minister Alexis Tsipras decided to call a July 5 referendum on a proposed bailout package.
Worried that the Greek crisis may trigger capital outflows, Mehrishi said the government is in touch with the RBI which will take necessary steps to deal with the issue.
The situation in Greece has no direct impact on India, he said but added that there may be some indirect effect via Europe on capital inflows and outflows here.
“Escalation of the Greek crisis led to nervousness across markets globally, which took its toll on the Indian market as well. While the Indian market did manage to recover a considerable part of the lost ground in intra-day trade, not much should be read into it for now,” said Hitesh Agrawal – Head Research, Reliance Securities.
“This is because markets are expected to remain volatile until some breakthrough is arrived at on the Greece bailout front. Market will wait with bated breath as to what will be the outcome of the Greek referendum later this week,” he said.
Meanwhile, in the broader market the BSE Sensex ended with a loss of 166.69 points at 27,645.15.
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