Pre-opening ticks: Greece to keep Sensex, Nifty on edge

Moneycontrol Bureau 

The growing uncertainty over Greece, may keep Indian market on the edge. The market is expected to remain volatile but may be a buying opportunity if it extends fall.

It was a weak start to the July series on Friday as investors remained cautious ahead of Greece deal talks. The 30-share BSE Sensex fell 84.13 points to 27811.84 and the 50-share NSE Nifty lost 16.90 points to 8381.10. The market breadth was weak as about 1183 shares advanced against 1491 shares declined on the Bombay Stock Exchange.

In case there is good news from Greece on Tuesday then the Nifty could rise to 8600-8650, said Deven Choksey of KR Choksey Shares, but a failure may drag it back to 8000.

Greek banks and stock markets are shut today while European central bank decides to keep the emergency funding to the country's banks at current levels.

The Greek PM has surprised euro zone leaders by calling for a referendum to be held on July 5 to ask voters to decide on whether to accept the bailout terms which his government opposes.

All eyes will be on German bond as European markets open later today. Euro plunged to a 1-month low after Greece failed to strike a deal with its international lenders. Euro trades below 1.10 to the dollar. A failure by Greece to repay a 1.6 billion-euro debt owed to the IMF  by Tuesday could lead to its exit from the euro zone, which many investors fear may weaken the entire currency bloc.

In commodities, Brent crude slipped over 1 percent to sub USD 63 per barrel. Nymex is around the 58 dollar mark.

Asian markets fell in opening trade. Japan's Nikkei fell 2.1 per cent while MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.8 per cent, drawing little help from more policy easing from China's central bank at the weekend.

Chinese stocks have plunged over 20 per cent in the last two weeks, hit by tight liquidity conditions ahead of the quarter-end and uncertainty over the central bank's monetary policy.

Investors are flocking to safer assets, staggered at huge uncertainty on the future of Europe, as Greece could become the first country to leave the currency bloc after a default.

The 10-year US Treasury yield fell 0.16 per centage point to 2.317 percent.