Mumbai: A barometer index of the Indian equity markets suffered a massive fall during the day's trade, partially recovered, and yet ended in the red as anxiety grew over the outcome of the Greece debt crisis on Monday.
Just a day ahead of the crucial deadline for Greece to repay part of its debt to the International Monetary Fund (IMF), sentiments were subdued and markets were panic-stricken.
The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) recovered from its initial plunge of about 602.65 points, only to close lower by more than 166 points.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) also bore the brunt of panic selling which was triggered by the Greek crisis.
Nifty closed the day's trade in the negative territory with a fall of 63 points or 0.75 percent at 8,318.40 points.
The 30-scrip S&P BSE Sensex, which opened at 27,451.07 points, closed the day's trade at 27,645.15 points, down 166.69 points or 0.60 percent from its previous day's close at 27,811.84 points.
The Sensex touched a high of 27,695.32 points and a low of 27,209.19 points in the intra-day trade.
According to Angel Broking, as expected the Indian markets opened in the red tracking the SGX Nifty, other Asian markets and global cues.
"The Greece issue has caused the downfall and the subdued sentiments globally. There is no clarity on 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, by when Greece has to repay part of its debt to the IMF.
On June 4, Greece 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," said 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.
Chinese market added pressure by cutting lending rates. China joined several major economies that have been forced to follow easier monetary policies. It lowered key lending rates by a 25 basis points.
This analysis underscores the challenge of a struggling global economy. Despite this, reluctance of the Reserve Bank of India on lowering lending rates, played on the minds of the investors.
Meanwhile, the Indian government is monitoring developments in Greece, but it does not have any concrete plans to deal with impact of the crisis.
"This is a dynamic and evolving situation. There is no firm plan that we can access. Nobody can predict what the exact situation would be," Finance Secretary Rajiv Mehrishi told reporters in New Delhi on Monday.
Indian industry has also flagged concerns that Indian exports will be hit if Greece defaults and situation develops into crisis for Europe.
"India's merchandise exports do not look promising this year and the troubles in Europe could only deteriorate the prospects," the Associated Chambers of Commerce and Industry of India (Assocham) said in a statement here.
During Monday's intra-day trade, a majority of sector-based indices of the S&P BSE ended in the red.
Heavy selling pressure was seen in automobile, healthcare, information technology (IT), consumer durables, bank, metal, capital goods, technology, entertainment and media (TECK), metal, oil and gas and realty sectors.
The S&P BSE automobile index plunged by 257.99 points, followed by the healthcare index which plummeted by 202.80 points, IT index crashed by 182.10 points, consumer durables index receded by 146.52 points and bank index fell by 144.03 points.
The S&P BSE metal index edged lower by 123.54 points, TECK index decreased by 84.30 points, capital goods index declined by 81.53 points, oil and gas index fell by 60.21 points and realty index was down by 32.07 points.
However, the S&P BSE fast moving consumer goods (FMCG) index ended the day's trade up by 21.57 points.
The major Sensex gainers in Monday's trade were: Hindustan Unilever, up 1.54 percent at Rs.900.05; NTPC, up 0.80 points at Rs.138.75; ITC, up 0.53 percent at Rs.310.15; Larsen and Toubro (LT), up 0.44 percent at Rs.1,787.80; and Bajaj Auto, up 0.41 percent at Rs.2,550.60.
The major Sensex losers were: Hindalco Inds, down 3.55 percent at Rs.112.80; State Bank of India (SBI), down 2.08 percent at Rs.259.55; Tata Motors, down 2.07 percent at Rs.428.85; Sun Pharma, down 2.03 percent at Rs.849.65; and Maruti Suzuki, down 1.93 percent at Rs.3,994.95.
Among the Asian markets, Japan's Nikkei plummeted by 2.88 percent, China's Shanghai Composite Index plunged by 3.29 percent. Hong Kong's Hang Seng decreased by 2.61 percent.
In Europe, the London FTSE 100 index receded by 1.78 percent, However, the French CAC 40 declined by 3.52 percent and Germany's DAX Index was lower by 3.23 percent at the closing bell here.