The key domestic benchmarks are likely to open on a cautious note today
tracking a mixed trend across markets in Asia after the European Central Bank
(ECB) tightened the terms of Greece’s bailout, adding pressure on the
Mediterranean nation’s new government which is diverging from an austerity path,
raising fears over the country’s exit from the currency union which may spark a
fresh financial contagion in Europe. The ECB restricted access to direct
liquidity lines amid concerns over Greece’s commitment to existing bailout
packages. China’s Shanghai Composite and Hang Seng rose after the central bank
cut the reserve requirements for lenders by 50 basis points, the first such
reduction since 2012, in a bid to lift growth in the world’s second biggest
economy. However, Japan’s Nikkei 225 tumbled as a stronger yen dimmed the appeal
of exporter stocks. Back home, the RBI’s decision to keep interest rates
unchanged this week has dampened investor sentiment as Governor Raghuram Rajan
insisted that further easing depends on the government’s commitment to keep its
fiscal gap under check.
