Market May Remain Volatile On Greece Concern

The BSE Sensex witnessed a gap down opening and fell over 600 points in early trade spooked by Greece concerns that may trigger capital outflows, it recovered over 435 points, powered by gains in HUL, ITC, L&T, ICICI Bank and Dr Reddy's, but still closed down over 166 points. The Nifty slipped below its crucial psychological level of 8,200 in intraday and closed down over 54.40 points or 0.6% at 8326.70. Broader markets also saw selling pressure with the BSE small-cap index falling by 1.49 %; while mid-cap index dropping 1.37 %.

Weakness in the rupee against dollar that depreciated by 26 paise to Rs 63.90 (intra-day) too prompted investors to trim positions, traders said. Sentiments dampened largely on global sell-off on fears that Greece may default on a debt repayment and likely crash out of the euro zone.

US stock markets on Monday suffered their biggest fall in two years Monday amid a global selloff after Greece closed its banks and imposed restrictions on cash withdrawals to try to prevent a deepening financial crisis from worsening amid faltering bailout talks with its international creditors. The Dow fell 350.33, or 1.9%, to 17,596.35 and wiping out all of the gains made so far in 2015. The Nasdaq and S&P 500 also suffered heavy losses, closing down 2.4% and 2.1%, respectively.

European stock markets were hit even harder with heavy losses Monday after Greece shut down its banking system in the latest twist of the Greek debt crisis. The pan-European Stoxx 600 closed 2.7% lower in its biggest one-day fall since October, wiping out most of the previous week’s rally. DAX and CAC plummeted 3.6% and 3.7% respectively, while their peripheral neighbours Spain and Italy plunged 4.5% and 5.1% on contagion fears. The FTSE 100 in London also lost 2%. Greece's stock market was closed.

Analysts' biggest fear is that other Eurozone countries struggling with relatively high debt loads and slow growth — especially Italy, Spain, and Portugal — would see their own borrowing costs jump as investors fled for the relative safety of U.S. or German debt.

Asian stocks climbed with U.S. index futures after following the biggest global selloff since 2013, while the euro pared its quarterly advance as investors watch developments in Greece. Japanese stocks swung between gains and losses. The Nikkei 225 Stock Average is up 0.11%. China's stock markets took another tumble early Tuesday; China's Shanghai composite lost another 3.7% to officially enter bear market territory — meaning a drop of 20% or more. Australia's S&P ASX 200 index slipped back into negative territory by 0.17%, after touching a five-month low at the start of trade. South Korean stocks edged up 0.27% in early trade, a day after the benchmark Kospi index finished at a one-week low.

Since SGX Nifty fell 27 points. Indian markets may remain volatile on Greece concern. The focus Tuesday shifts to whether Greece will default on a USD 1.7 billion payment due to the International Monetary Fund.