Asian equities tumbled on Monday on expectations of a Greek eurozone
exit after Athens announced a referendum on creditors' proposals, while
Chinese stocks gyrated wildly after losing some 20% in the past two
weeks.
Shanghai saw a 10% swing from gains to losses, extending a
painful sell-off since hitting a June 12 peak. A weekend central bank
interest rate cut was unable to offset profit-taking and the effects of a
tightening of trading rules.
Tokyo ended down 2.88% at 20 109.95, Sydney shed 2.33% to 5 422.5, and Seoul was 1.42% off, giving back 29.77 points to 2 060.49.
Hong Kong tumbled 3.63% at one point before ending down 2.61% at 25 966.98
Shanghai, which rose 2.5% in early trading, slumped by 7.58% at one point despite the rate cut, but ended down 3.34% at 4 053.03.
Shenzhen, which added 1.77% in the first few minutes, closed 6.06% lower, giving back 151.56 points to 2 351.40.
China's strict capital controls and limits on foreign investment mean its stock markets are largely detached from other major bourses. Their recent ascent has been driven by domestic policy factors.
Greek Prime
Minister Alexis Tsipras stunned world markets at the weekend when he
announced the national poll for July 5 in which voters will be asked to
decide on creditors' reform proposals, after five months of talks failed
to find common ground. The EU and IMF responded by refusing to
extend Greece's bailout beyond its June 30 expiry date, meaning it will
default on a key payment and possibly crash out.
Tsipras has now imposed capital controls throughout the country to avoid capital flight, with banks closed until July 6 and ATM withdrawals limited to 60 euros a day.
Speaking on national television on Sunday, Tsipras said the Bank of Greece had recommended a "bank holiday and restriction of bank withdrawals" after the European Central Bank said it would not increase its financial support to Greek lenders despite early signs of a bank run.
European equity markets sank in early trade Monday, with Frankfurt, Paris, Madrid and Milan each losing more than four percent, while London tumbled 2.2%. The Athens stock market is closed until July 7.
The euro tumbled to $1.1070 and ¥136.09 on Monday, from $1.1160 and ¥138.26 in New York on Friday.
Tokyo ended down 2.88% at 20 109.95, Sydney shed 2.33% to 5 422.5, and Seoul was 1.42% off, giving back 29.77 points to 2 060.49.
Hong Kong tumbled 3.63% at one point before ending down 2.61% at 25 966.98
Shanghai, which rose 2.5% in early trading, slumped by 7.58% at one point despite the rate cut, but ended down 3.34% at 4 053.03.
Shenzhen, which added 1.77% in the first few minutes, closed 6.06% lower, giving back 151.56 points to 2 351.40.
China's strict capital controls and limits on foreign investment mean its stock markets are largely detached from other major bourses. Their recent ascent has been driven by domestic policy factors.
Tsipras has now imposed capital controls throughout the country to avoid capital flight, with banks closed until July 6 and ATM withdrawals limited to 60 euros a day.
Speaking on national television on Sunday, Tsipras said the Bank of Greece had recommended a "bank holiday and restriction of bank withdrawals" after the European Central Bank said it would not increase its financial support to Greek lenders despite early signs of a bank run.
European equity markets sank in early trade Monday, with Frankfurt, Paris, Madrid and Milan each losing more than four percent, while London tumbled 2.2%. The Athens stock market is closed until July 7.
The euro tumbled to $1.1070 and ¥136.09 on Monday, from $1.1160 and ¥138.26 in New York on Friday.
No comments:
Post a Comment