Home >news >world >Global markets take Greece’s ‘no’ vote in their stride

New York/London: Financial markets barely shuddered after Greek voters rejected austerity demands, with the euro slipping less than 0.5% and US stocks paring losses, in a sign investors see the crisis there as contained for now.

The Standard and Poor’s 500 Index slipped 0.5% at 11pm, while the Stoxx Europe 600 Index lost 1.2%. The losses were muted compared with a week ago, when Greece first announced a referendum. The euro declined 0.3% to $1.1083, paring a loss of as much as 1 percent. Treasury 10-year yields fell eight basis points to 2.30%. Shanghai shares rose amid intensifying efforts to arrest a $3.2 trillion selloff.

While investors sold riskier assets after Greeks voted in a referendum on Sunday to reject their creditors’ austerity terms for aid, the declines were muted compared with a week ago. European finance ministers are waiting for a proposal to re-start bailout talks.

In a bid to speed the process, Greek finance minister Yanis Varoufakis said he was stepping down after more than five months of confrontation.

“Our opinion has been and remains at this point that Greece is more noise than anything else," said Walter Todd, who oversees about $1 billion as a chief investment officer for Greenwood Capital. “I think it’s going to be hard to get any real traction until we get some type of clarity. You can’t escape the noise created by this situation in Greece."

European stocks plunged 3.4% last week in their biggest drop of the year, while US equities posted the worst week since March after Greece unexpectedly called the referendum. The euro has been resilient in the face of the Greek crisis, which could lead to the country’s exit from the common currency.

“After five years, you have to believe a measure of the news from Greece is already built into the market," Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird and Co., which oversees $110 billion, said by phone.

“How many times can you be concerned about the same news? It loses its effectiveness over the near term."

German bunds rose, send the 10-year yield lower by one basis point, while yields on Spanish and Italian bonds climbed at least eight basis points. Both rates jumped more than 20 basis points on 29 June, the first trading day after Greece announced the referendum.

A US-listed exchange-traded fund tracking Greek stocks fell 5.3%, while American depositary receipts of National Bank of Greece SA declined 8.9%. Greece’s stock exchange has been closed for the past week.

“The muted reaction implies the market is not too worried about a Grexit," said Jan von Gerich, chief strategist at Nordea Bank AB in Helsinki.

“It is still early, and bigger moves may well surface in the near future, but I do not expect to see the start of another financial crisis."

Among stocks moving in the US, Humana Inc. climbed 3.7% in the US after Aetna Inc. agreed to buy the rival health insurer last week.

The MSCI Emerging Markets Index dropped 2.1%, the most in a week. Russia’s ruble and South Africa’s rand fell at least 0.7 %.

The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong declined for a third day, sliding 3%.

The Shanghai Composite Index gained even as two shares fell for every one that rose, amid government efforts to shore up a market that has tumbled 27 percent from its June 12 peak.

Over the weekend, China suspended initial public offerings, while brokerages pledged to buy shares and the central bank said it would provide liquidity for margin trading.

Copper for delivery in three months slid as much as 4.2% to the lowest price since 3 February. Nickel fell as much as 4%, while lead and aluminium were both close to entering bear markets. Gold for immediate delivery fell 0.3% to $1,164.88 an ounce in London trading. Platinum and palladium both dropped more than 1%.

Crude oil retreated, with Brent falling 2.3% to $58.95 a barrel in London trading, dropping below the $60-dollar mark for the first time since mid-April. In New York, West Texas Intermediate slid 4.1% to $54.65 a barrel, and touched the lowest since 15 April.

Garfield Reynolds and Benjamin Purvis in Sydney, Eshe Nelson, Cecile Vannucci, John Deane and Neil Denslow in London, Marcus Bensasson, Matthew Campbell and Eleni Chrepa in Athens, Emma O’Brien in Wellington, Anna Kitanaka in Tokyo and Nick Gentle in Hong Kong contributed to this story.


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