Pre-opening: Is Greece no vote good news for Indian market?

Moneycontrol Bureau 

As Greece voted for ‘no’ in the referendum last night, the crucial question is how it will impact Indian market. Grexit fears may spook Dalal Street and the market is expected to open sharply lower as SGX Nifty is under pressure. SGX NIFTY is down around 1 percent Asia is trading with cuts of over 1 percent.

Investors will be keenly watching monsoon and earnings season while 8200 is now a firm bottom for Nifty. With weak IT earnings already getting priced in and monsoon progress fading after strong start, it may be a difficult climb for the bulls though.

However, Vikas Khemani of Edelweiss says India will not see any impact on the Greeks voting a 'no' in the referendum. He says the market will be more worried about the Monsoon Session in the Parliament. He believes the market can see levels of 8000-8200 on the back of developments in Greece.

Eric Fishwick of CLSA too agrees that Indian market won't be impacted, infact the country will benefit from the implied easing in global liquidity. "The weaker the world trade environment the more attractive those economies that have historically low correlations between it and GDP growth. These are China, India, Indonesia and Philippines.  India increasingly stands out if the EUR does weaken further or faster than we expect," he says in a report.

According to Fishwick, Greece is unlikely to have a big impact on Fed policy but Greece will contribute to a US curve flattening and will be inevitably seized on by dovish commentators as a reason why the Fed shouldn’t tighten.  "As current account deficit countries Indo and India would benefit from the implied easing in global liquidity," he adds.

Greeks voted decisively in favour of the "no" option- asking their government to turn down a proposal from its creditors that would have included more austerity reforms.

The government will now try to bring its creditors back to the table, with renewed confidence that it has a mandate from its people to press for more concessions.

The first area for concern is Greek banks, which are expected to remain closed until at least Tuesday, after a week where Greeks have been unable to withdraw more than 60 euros at a time.

US stock futures trade sharply lower after a resounding 'no' from Greeks in the referendum.

Among the other asset classes, the euro fell around 1 percent amid fears of a Grexit.  Dollar index was around the 96-levels. Brent crude slipped to sub 60 dollars per barrel while Nymex crude was also over 3.5 percent lower Gold rose above 1170 dollars an ounce.