Sensex closes 300 points lower on Greece deficit shock

Indian equity benchmarks fell nearly 2% on the first session of October on renewed fears of Greece default as its government stated it would miss deficit targets for 2011 and 2012. The 30-share BSE Sensex shed 302.31 points, to close at 16,151.45 and the 50-share NSE Nifty fell 93.75 points, to end at 4,849.50.

European markets like France's CAC, Germany's DAX and Britain's FTSE were down 2-2.5%. Asian markets too closed sharply lower; Hang Seng plunged 4.4%. Nikkei, Straits Times and Taiwan fell 1.8-3%.

Bruno Verstrate, CEO of Nautilus Invest said Greece has taken the whole global market hostage and only Germany can ease the pain.

"The Greek Minister said that the next tranche of aid was already decided on and later during the day that news came out that they would not be able to get their deficit target for 2011 and 2012. The magic formula of cutting into expenses and making the economy grow is still not sound. The debt to GDP is being hit from those debt levels which continues to go up and from the GDP level which has less growth. This has sent shockwaves given the extent of measures that the Greek government already took," Verstrate said.

Greek government approved USD 8.8 billion austerity measures during weekend, which came ahead of European officials meet in Luxembourg on Monday.

On the home turf, shares of financial, metal, capital goods, power, realty and select technology companies pulled the markets down. Heavyweight Reliance Industries was the leading dragger throughout the session, falling 2.5%.