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The Sensex and Nifty both lost 4.
5% and 5% to fall considerably under the glorified 17k benchmark.
The markets have had a lot to digest over the tender situation of Greek default.
The short lived artificial quarantine has now not only breached European economies but is spilling out on the globe.
Euro instability is becoming a larger issue than expected.
Analysts not only have to worry about the PIIGS (Portugal, Ireland, Italy, Spain) who by themselves have a plethora of problematic financial shortcomings but also have to question the Euro currency itself.
If a country in the Union can escape a gaping hole such as this one through a modern application of Keynesian principle on the ECB's wallet then is there no need for a preventive stipulation in the long term? It is blatantly evident then that the other PIIGS are ticking time bombs.
The EU members have amassed large deficits in the last recession itself.
It's difficult to even classify their growth as being mediocre.
Portugal is ready as ever to spill over now as well, their unemployment (over 10%), high public debt and dismal growth is enough to make the Euro a questionable currency in itself.
Our own Indian investors are a shaky bunch, just when they thought the growth story and quarterly numbers were too good to be true, it seems they were.
The question arises, what impact will this leave on our markets and the answer is a vague one (as all things are in the markets).
Prior to this India was riding on positive domestic data but no market is fortified enough to ignore international cues.
Investors are advised to hold back what they can until some assuring resolution is passed of course, after that it may be all guns blazing once again.
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