Pre Session- Bearish opening seen on Greek “no” vote
06/07/2015
Dalal Street is poised to witness a negative opening on Monday tracking a bearish trend across most Asian markets as Greece’s rejection of further austerity measures as a pre-condition to unlock fresh European rescue aid raised the risk of the Mediterranean nation’s exit from the euro, an event that could rattle financial markets across the globe. Sunday’s referendum results showed that 61 per cent of Greeks voiced against further spending cuts and tax hikes imposed by the country’s creditors, pushing Greece into an economic unknown with its euro membership now in limbo, prompting risk aversion among global investors. The 30-share Sensex which advanced to the highest level in two and a half months on Friday, up by 146.99 points or by 0.53 per cent to end at 28,092.79 as traders cheered the RBI’s positive prognosis over Asia’s third biggest economy may come under pressure today amid fears of a worsening Greek debt crisis while caution ahead of the much anticipated corporate earnings season may also keep traders on the sidelines. Weakness in the SGX CNX Nifty Index futures for July delivery which fell 0.7 per cent at 8,431 at 10:15 am Singapore time, signals a gap down opening at Dalal Street on Monday. Most Asian shares were trading in the red as an outright rejection of further austerity by Greece cast doubts over the country’s euro future, curbing the lure for risky assets. While Hang Seng and Nikkei 225 shed more than 1 per cent, China’s Shanghai Composite notched up a smart recovery, rallying more than 3 per cent after regulators suspended initial public offerings while the country’s brokerages vowed to purchase shares and the central bank promised to provide more liquidity for margin trading in measures aimed at shoring up equities and halting the biggest three-week slide in stocks since 1992. Wall Street was shut on Friday on account of the Independence Day Holiday.
Back home, the June quarter earnings season kicks-off this week with IT major TCS unveiling its Q1 numbers on Thursday. After a dismal March quarter, investors are expecting a much improved performance from India’s largest software services exporter in the sequentially strong June quarter. Meanwhile, May industrial production data will be released on Friday while the progress of the South-West Monsoon will also be crucial in shaping investor sentiment this week. While the Indian Met Department last week forecast a deficit rainfall in July, Skymet, a private forecaster predicted “normal” monsoon for the month.
