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Greece unlikely to impact Indian economy, say fund managers

Despite a gap-down opening, equity and debt markets closed in the green and so did the rupee, which rose for the fifth day in a row, gaining four paise against the American greenback.

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The Greek crisis is unlikely to have any impact on the Indian economy since it has only negligible exposure to the troubled Mediterranean island, fund managers said here on Monday.

"Despite what happened in Greece, the domestic market has not been affected since we have only negligible direct linkage with Greece," UTI MF Group President for Sales and Marketing Suraj Koeley told PTI.

"Going forward, it will depend on how other EU nations like Spain and Italy in particular, which are more indebted than Greece, react to these developments," he said.

Quantum Asset Management Company (AMC) said that the Greek tragedy is not such a big event for the Indian economy, since most of its debt is owned by European governments.

"The failure of Greece is not such a big event for the Indian economy, since most of its debt of 320 billion Euros is owned by other governments. However, the European Central Bank has ringfenced other EU members by stating that it would buy their bonds," Quantum AMC Fixed Income Head Murthy Nagarajan said.

"In the domestic context, the impact is not expected to be high since exposure is very low. However, the Greece issue would increase risk aversion towards emerging markets, which would affect capital flows to our markets in the short-term," Nagarajan said.

This was evident from the way domestic markets behaved on Monday. Despite a gap-down opening, equity and debt markets closed in the green and so did the rupee, which rose for the fifth day in a row, gaining four paise against the American greenback.

"That both capital and debt markets opened weak only to recoup later on Monday, only shows that Greece is not a significant contributor to the euro-zone," Kotak AMC Chief Investment Officer for Debt Laxmi Iyer said.

Fund experts have advised investors not to worry about a Greek exit from the euro-zone. 

"As long as the euro-zone finds a solution to the Greek crisis, and it does not spread to bigger economies like Spain and Italy, the after-effects will be limited since Greece is a very small part of the global economy," ICICI Prudential Mutual Fund Managing Director and Chief Executive Nimesh Shah said.

"Investors need not worry about a Greek exit from the euro-zone. Instead, it's a great time to be an investor here as this market provides good opportunities to buy equity and debt," he said. 

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