Greece Crisis: Sensex dips 500 Points

BSE Sensex fell sharply on Monday as the deepening Greece crisis rocked global stock and currency markets. With Greece set to default on its debt repayment, the European country has shut banks and stock markets temporarily to prevent its financial institutions from collapsing. This has raised the prospect of Greece becoming the first country to leave the currency bloc (euro) after a default.

The Sensex fell over 500 points while Nifty fell close to 8200 levels in early trade. The rupee fell to 63.90 against the dollar against Friday’s close of 63.64.

Stocks to watch: In the IT arena, Tech Mahindra, Wipro, HCL Tech and TCS have significant exposure to the euro zone. Among auto or auto component manufacturers, Tata Motors, Bharat Forge and Motherson Sumi have significant European business. Among the metal pack, Tata Steel and Hindalco are also significantly exposed to the euro zone.

Over the weekend, Greece failed to clinch a deal with its international lenders to avert a default. Greece must repay IMF $1.8 billion by Tuesday or be declared a defaulter.

According to Reuters, twice-bailed-out Greece owes its official lenders as much as 242.8 billion euros ($271 billion), with Germany by far the largest creditor. Greece has called a referendum on July 5 to decide on the cash-for-reforms terms proposed by its creditors.

Greece imposed capital controls and ordered banks to close temporarily after the European Central Bank froze a vital financial lifeline following the breakdown of bailout talks between Athens and foreign creditors. Greek banks will close until to July 6. All credit institutions in Greece, including branches of foreign banks, are affected. ATMs will open from Monday afternoon. Daily cash withdrawals will be limited to 60 euros.

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Source:Ndtv

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