There was relatively muted reaction on stock markets across the world concerned about Greece’s possible exit from the eurozone. The FTSE 100 Index initially dropped 73.3 points to 6509.5 after Greece voted to reject the terms of an international bailout in Sunday’s referendum. By midday the index had risen to around 6547. And after opening sharply lower, European stock markets recovered some ground on the news that Greece’s finance minister Yanis Varoufakis had resigned.
The Stoxx 50 index of leading European shares was down 1.6% while Germany’s DAX fell 1.2%. Earlier, Hong Kong stocks plunged 3.18% by the end of the morning’s session as the No vote to further austerity overshadowed news that China had unveiled fresh measures to support slumping mainland markets.Tokyo’s benchmark stock index dropped 1.58% this morning. The Nikkei 225 at the Tokyo Stock Exchange fell 324.63 points to 20,215.16 by the break.
On foreign exchange markets, the dollar slipped to 122.63 yen from 123.05 yen on Friday while the euro was also lower at 135.43 yen from 136.31 yen. But the euro held up against the dollar, after dropping in the immediate wake of the vote. It was at $1.1044 in Tokyo trade, ticking up from $1.0963 soon after early results of the bailout reforms vote were out. 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.”
European leaders have reacted with a mix of dismay and caution after Greek voters defied their warnings of a possible Grexit by saying No. In response, jittery investors piled into the yen – a safe haven during times of turmoil – as the Sunday referendum sparked uncertainty about what happens next following months of fruitless talks between Greece and its EU-IMF creditors, Sky News reports.