European deal boosts equity markets across the globe. Indian markets join in frenzy. In our opinion we are getting overexcited. Our problems currently are more of domestic nature. Even for the highly acclaimed deal, there shouldn’t be much to be happy about. Our worst fears have come through with banks already writing off 50% of their lending to Greece. That is as good as default.
Moreover, rest of PIIGS are now growing to drive harder bargain and demand for similar write offs. The expected result remain same as before the agreement. European banks book loses and domino effect spreads over to US and spills over across the globe.
We hold a cautious approach to macro factors and are more likely to stay away from the party rather than foot the bill at later date. Will wait for positive singals from RBI and Manmohan, rather than FED and Merkel, to change the stance.