Sensex sheds 310 points on Greek, Portuguese woes

Indian markets caught the contagion spreading all across the world and fell sharply on Wednesday on the fears of a deepening European debt crisis and its potential to slowdown the pace of the economic recovery worldwide, reports HT Correspondent.

Indian markets caught the contagion spreading all across the world and fell sharply on Wednesday on the fears of a deepening European debt crisis and its potential to slowdown the pace of the economic recovery worldwide.

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The Sensex at the Bombay Stock Exchange witnessed its biggest fall in 12 weeks and lost 310 points or 1.75 per cent to close at 17,380 on Wednesday. The broader Nifty at the National Stock Exchange, too, fell by 93 points or 1.75 per cent to close at 5,215.

Other Asian markets also fell. While Japan’s Nikkei 225 fell 2.6 per cent, stocks were down 2 per cent in Singapore and 1.5 per cent in Hong Kong.

Even as the markets have remained cautious on the Greece episode for quite some time now, Standard & Poor’s downgrade of Greece and Portugal pulled the trigger on Wednesday.

Experts in India feel this may lead to a rise in borrowing costs for Indian companies abroad.

“In March when the crisis peaked, the risk premium on emerging markets rose by 50 basis points (100 basis points is 1 per cent) in a matter of 10 days and this time, too, if it persists and spreads across other countries, the cost of borrowing for Indian companies will go up and will impact significantly,” said Abheek Barua, chief economist, HDFC Bank.

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