Greece crisis good for Indian markets, know how

Experts are of the view that domestic factors such as monsoon, quarterly earnings, and upcoming Parliament session will be more crucial for Indian markets rather than the Greece economic crisis.

However, the Indian markets plunged today while the rupee depreciated after Greece voted 'no' to harsh bailout conditions proposed by its creditors, raising risk of a full-blown crisis in financial markets, reported the Economic Times.

The benchmark indices slightly managed to recover losses. The S&P BSE Sensex lost more than 300 points in early trade, slipping below its crucial psychological level of 28,000, while the Nifty has broken below 8,400 in trade.

"We are now in an uncharted territory. The reactions of the Greek government, the Euro Group, and the ECB are going to be crucial to how the crisis unfolds and are unknown at this stage," the financial daily quoted HSBC’s report.

But, experts are of different opinions. JPMorgan head-emerging Asia Economics, Jahangir Aziz, said: "Greece is not really going to be a pivotal event. The pivotal event is going to be domestic forces and in particular what happens in the monsoon session of Parliament."

He added: "The Greek event by itself probably adds a little bit more volatility to that path, but nothing more than that, and again I am sounding like a broken record over the years, but it is going to be what happens in the monsoon session of parliament."

ET has listed some factors why Indian investors should not be worried about the current crisis:
· Fall in crude oil prices & dollar strength

Nilesh Shah of Kotak AMC is of the view that one indirect advantage of the Greece crisis is fall in crude oil prices, and second, as the dollar has strengthened, the possibility of US delaying its interest rate hike is increasing. Both these things are good for India.
Moreover, oil prices fell sharply after Greece rejected austerity measures demanded in return for bailout money, while China rolled out an unprecedented series of steps to prevent a full-blown stock market crash.

· No impact on the Indian economy

Andrew Holland - CEO, Ambit Investment Advisors, said: "India from the economic view point of view should not have any impact at all from Greece. If the monsoon is ok, oil prices lower, we could see another 25-50 bps cut in interest rates very quickly."
Pankaj Sharma, executive director and head of equities at Equirus Securities, is of the opinion that the importance of what Greece decided is much less today against the repercussions which were possible some 3-4 years back. Not just the contribution of Greece has shrunk in the European Union, the institutional impact.

· Value buying

Most analysts are of the view that the current fall is more of a knee-jerk reaction, but Indian markets should be able to bounce back, and investors should use dips to accumulate quality stocks.

"People are ready with the buying side, once it gets cleared with a positive news flow for equity markets and the global markets as well," says Yogesh Mehta, VP, Group Leader - PCG Advisory - Equities, Motilal Oswal Securities Ltd in an interview with ET Now.

(Image: Reuters)