Arab Today, arab today asia markets sink after greece votes no to austerity
Last Updated : GMT 01:58:56
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Asia markets sink after Greece votes 'No' to austerity

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Arab Today, arab today Asia markets sink after Greece votes 'No' to austerity

'No' supporters celebrate their victory
Hong Kong - AFP

Asian stocks mostly fell Monday after Greek voters rejected more austerity demands from creditors, fuelling fears the country will crash out of the eurozone, but the euro recovered from initial losses as dealers wait for European leaders' next move.

In a separate drama, Chinese shares surged almost eight percent in the first few minutes of trade after Beijing introduced measures to support mainland markets, which have plunged by a third over the past three weeks.

Despite warnings from European leaders that Sunday's referendum was effectively an in-out poll on the euro, more than 60 percent of the voters heeded the government's call to vote "No", sending traders running for the doors.

Tokyo fell 2.18 percent in the afternoon, Seoul shed 1.83 percent, Sydney lost 1.18 percent and Wellington was off 0.98 percent.

Shanghai opened up 7.82 percent before but eased to sit 2.16 percent higher by lunch. Hong Kong climbed 0.70 percent in early trade -- riding the coat-tails of the mainland gains -- but ended the morning session 3.18 percent lower.

In Japanese trade the euro was at $1.1038 and 135.20 yen, clawing back some of the losses suffered in New York electronic trade Sunday, when it fell to $1.0963 and 134.91 yen.

Shinya Harui, currency analyst at Nomura Securities in Tokyo, said: "There is no particular reason for the euro to be holding up, but markets are still assessing the spill-over risks in the case of a Greek exit from the eurozone."

Greek Prime Minister Alexis Tsipras had campaigned against accepting debt reform proposals from its creditors -- the ECB, the European Commission and the International Monetary Fund (IMF) -- claiming a "No" vote would strengthen his hand in negotiations.

- 'Very regrettable' -

German Chancellor Angela Merkel and French President Francois Hollande hastily called a European summit for Tuesday after stating the Greeks' decision must "be respected".

German and French finance ministers were set for talks beginning in Warsaw at 0800 GMT Monday, while the Euro Working Group of top treasury officials will meet in Brussels.

But Jeroen Dijsselbloem, leader of the Eurogroup of eurozone finance ministers, who had warned ahead of the poll that a "No" vote would likely lead to Greece exiting the single currency, termed the result "very regrettable".

And German vice chancellor Sigmar Gabriel took an even dimmer view, saying Tsipras had "torn down the last bridges which Europe and Greece could have crossed to find a compromise".

He added that, despite Tsipras' assertions, a fresh round of bailout talks now were "difficult to imagine".

European Commission president Jean-Claude Juncker was to speak to the European Central Bank (ECB) and eurozone finance ministers on Sunday and Monday.

But analysts warned the decision had likely put Athens on course to exit the eurozone.

Nomura's Harui said: "I personally think the chance (of the Greek exit) is very high, at around 70-80 percent.

"A Greek exit would shake confidence in what had been 19-nation solidarity, which could fuel anti-euro movements within Europe."

And Mark Lister, head of private wealth research at Craigs Investment Partners in Wellington, told Bloomberg News: "There's a whole range of unpredictable outcomes.

"It's surprising that the 'No' vote won so convincingly, certainly more decisively than the polls had suggested. This puts us in limbo for so much longer and it's very negative for risk sentiment."

On oil markets, US benchmark West Texas Intermediate for August delivery fell $1.97 to $54.96 a barrel and Brent crude for August eased 56 cents to $59.76.

Gold fetched $1,168.21 compared with $1,168.43 late Thursday.

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