Mumbai Markets rebounded on Monday with Sensex ending 133 points up while Nifty closed above 8500 for 1st time since April 17.
The stock markets had fallen more than one per cent on Monday, as blue-chip stocks such as ICICI Bank Ltd declined on risk aversion linked to Greece, while IT stocks such as Infosys Ltdfell on caution ahead of quarterly earnings.
Asian stocks hit a six-month trough and the euro stumbled on Monday after a Greek vote against austerity measures endangered its future in the single currency and raised the risk of a full-blown crisis in the euro zone.
IT firms' earnings are expected to be soft amid profit warnings by companies such as Tech Mahindra, Persistent Systems, due to client-specific and cross-currency issues.
"We have been saying for months now, India has nothing to worry about, this is a European problem," said G. Chokkalingam, founder of Equinomics, a Mumbai-based research and fund advisory firm.
Chokkalingam said he expects to see only a marginal improvement in corporate earnings for the quarter ended June.
The 30-share BSE Sensex was down 0.4 per cent after earlier falling as much as 1.1 per cent and the 50-share Nifty was trading 0.3 per cent lower, heading towards their biggest intra-day declines since June 11.
Blue-chips stocks led the decline. ICICI Bank fell 1.2 per cent, while Tata Motors lost 1.8 per cent.
IT stocks also fell. Infosys shed 1 per cent, while Tech Mahindra fell 1.6 per cent.
After failing to reach a deal with the Eurogroup on an extension of its bailout programme Greece's radical leftist government closed the country's banks, imposed capital controls until July 6 and defaulted on a huge IMF payment.
Eurozone finance ministers said when they met on Wednesday that there were "no grounds" for any more discussions on Greece's debt crisis until after Sunday's referendum, in which the Greek government urged a 'No vote'.
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