Indian investors should not panic on Greece crisis

Mr. Rohit Gadia, Founder & CEO, CapitalVia Global Research Limited

Greece is in the process of repaying the massive debt that it has taken on and by the end of this month needs to pay €1.6 billion to the International Monetary Fund (IMF). The trouble is that the country is practically bankrupt and needs bailout funds. If Greece does not pay the IMF by June 30, it will be declared to be in a default. It may also have to leave the Euro Zone the country owes around €240 billion to the European Commission, the European Central Bank (ECB) and the IMF, together referred to as the troika. Amid this uncertainty Indian benchmark index reacted sharply and experienced a major crackdown today. Nifty Jul Futures opened gap down and tested the low of 8191.40. Although there is nothing to worry much this time as India is well positioned compared to the previous period of crisis, It has foreign exchange reserves of $355 billion, relatively stable currency and improved fundamentals. Thus at this point of time Greece isn't a major worry but it can lead to volatility and slowdown In Indian exports. Bottom line for stability in Indian markets is focus on key reforms land Bill & GST and others.

Nifty was trading dicey throughout the session today; It opened in Red and was trading with negative sentiments. Towards the end of the session slight recovery was seen and we are expecting that markets will be back on track as there is no direct impact on Indian markets. From a global investors' perspective, India still remains one of the most attractive destinations. Fundamentally, India should find allocation from most global portfolio managers focusing on emerging economies.

In case of International market crash Indian investors should not panic as this is just knee jerk reaction that Nifty and other bench mark index may give. Should hold the existing positions as it is and can initiate fresh buying on dips.

Source : Equity Bulls

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