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| Dismay in European and Asian Markets After Greek Vote | Dismay in European and Asian Markets After Greek Vote |
| (35 minutes later) | |
| PARIS — European and Asian stock markets dropped on Monday but did not plunge, as investors reacted with muted dismay to the results of the Greek referendum and showed nervousness about steep declines in China’s stock market over the past three weeks. | PARIS — European and Asian stock markets dropped on Monday but did not plunge, as investors reacted with muted dismay to the results of the Greek referendum and showed nervousness about steep declines in China’s stock market over the past three weeks. |
| The Euro Stoxx 50 index, which groups big blue-chip shares from across the eurozone, fell 1.76 percent in early trading. In London, the benchmark FTSE 100 index dropped 0.93 percent. The euro slipped 0.3 percent to $1.1081. | The Euro Stoxx 50 index, which groups big blue-chip shares from across the eurozone, fell 1.76 percent in early trading. In London, the benchmark FTSE 100 index dropped 0.93 percent. The euro slipped 0.3 percent to $1.1081. |
| Trading in Standard & Poor’s 500 index futures indicated that stocks would fall slightly at the opening in New York. | Trading in Standard & Poor’s 500 index futures indicated that stocks would fall slightly at the opening in New York. |
| The bonds of Italy, Portugal and Spain, seen as the most exposed to contagion from the Greek crisis, all fell, with their yields, which move in the opposition direction of prices, spiking. Yields on British, German and United States government bonds also fell, as investors turned toward assets they considered safer. | The bonds of Italy, Portugal and Spain, seen as the most exposed to contagion from the Greek crisis, all fell, with their yields, which move in the opposition direction of prices, spiking. Yields on British, German and United States government bonds also fell, as investors turned toward assets they considered safer. |
| Economists at Barclays in London said they believed that “any contagion can probably be contained,” but they cautioned that “time and again, markets have underestimated the negative outcomes on Greece.” | Economists at Barclays in London said they believed that “any contagion can probably be contained,” but they cautioned that “time and again, markets have underestimated the negative outcomes on Greece.” |
| The Shanghai market had jumped sharply in early trading as the government poured money into brokerage firms to help them and their customers buy shares. The market leapt 7.8 percent at the start, but it surrendered half of those gains in the first 10 minutes of trading and closed 2.4 percent higher. The smaller Shenzhen stock market also started strongly but fell 2.7 percent by the end of trading. | |
| Oil prices fell 3.2 percent, as traders placed bets that recent events could lead to slower global economic activity and weaker demand. Bond prices rallied in Australia, and gold and silver prices climbed, as investors sought safety in response to uncertainty about whether Greece would stop using the euro and about whether mainland China’s economy would slow after investors there lost $2.7 trillion in the stock market over the past three weeks. | Oil prices fell 3.2 percent, as traders placed bets that recent events could lead to slower global economic activity and weaker demand. Bond prices rallied in Australia, and gold and silver prices climbed, as investors sought safety in response to uncertainty about whether Greece would stop using the euro and about whether mainland China’s economy would slow after investors there lost $2.7 trillion in the stock market over the past three weeks. |
| The Nikkei 225-share index in Japan closed 2.1 percent lower, and the Kospi in South Korea dropped 2.5 percent. The stock market in Australia, where mining companies are heavily dependent on Chinese demand, finished down 1.1 percent. | The Nikkei 225-share index in Japan closed 2.1 percent lower, and the Kospi in South Korea dropped 2.5 percent. The stock market in Australia, where mining companies are heavily dependent on Chinese demand, finished down 1.1 percent. |
| Some of the sharpest moves involved currencies. The euro fell and the Australian and New Zealand dollars dipped slightly. | Some of the sharpest moves involved currencies. The euro fell and the Australian and New Zealand dollars dipped slightly. |
| Kymberly Martin, a currency strategist at the Bank of New Zealand, said that the Greek vote and China’s stock market decline both tended to have similar effects on currencies and stock markets. | Kymberly Martin, a currency strategist at the Bank of New Zealand, said that the Greek vote and China’s stock market decline both tended to have similar effects on currencies and stock markets. |
| “It’s very difficult to disentangle what proportion is the eurozone and what proportion is China,” she said. “Probably both factors are affecting the market in the same direction.” | “It’s very difficult to disentangle what proportion is the eurozone and what proportion is China,” she said. “Probably both factors are affecting the market in the same direction.” |
| But other economists saw the events in Greece as more influential. | But other economists saw the events in Greece as more influential. |
| “It’s more Greece, but those China concerns are also there,” said Richard Grace, a currency and fixed-income strategist at the Commonwealth Bank of Australia. | “It’s more Greece, but those China concerns are also there,” said Richard Grace, a currency and fixed-income strategist at the Commonwealth Bank of Australia. |
| He also questioned whether the sharp gains for Australian bonds would endure, saying that those bonds often jump in value in response to overseas events that prompt investors to seek safety. But the jumps are often transitory, he noted, and recede after European and American markets begin trading. | He also questioned whether the sharp gains for Australian bonds would endure, saying that those bonds often jump in value in response to overseas events that prompt investors to seek safety. But the jumps are often transitory, he noted, and recede after European and American markets begin trading. |
| E. William Stone, the executive vice president and chief investment strategist at the PNC Asset Management Group in Philadelphia, said that most investors had been expecting a yes vote on the Greek referendum. Instead, with more than 90 percent of the vote tallied, more than 60 percent of the voters had chosen no. | E. William Stone, the executive vice president and chief investment strategist at the PNC Asset Management Group in Philadelphia, said that most investors had been expecting a yes vote on the Greek referendum. Instead, with more than 90 percent of the vote tallied, more than 60 percent of the voters had chosen no. |
| “I won’t be surprised if we get some larger sell-offs” as the day progresses, he said. | “I won’t be surprised if we get some larger sell-offs” as the day progresses, he said. |
| Unlike Ms. Martin, he said that Greece would be the dominant influence on markets, particularly in Europe and the United States. While the Shanghai stock market has lost more than a quarter of its value since June 12, it is still up nearly 80 percent from a year ago. | Unlike Ms. Martin, he said that Greece would be the dominant influence on markets, particularly in Europe and the United States. While the Shanghai stock market has lost more than a quarter of its value since June 12, it is still up nearly 80 percent from a year ago. |
| “It almost seems like the Chinese authorities are overreacting,” he said. | “It almost seems like the Chinese authorities are overreacting,” he said. |
| On Monday, China’s state-run news media issued a volley of commentaries declaring faith in the government’s ability to restore confidence to the stock market. | On Monday, China’s state-run news media issued a volley of commentaries declaring faith in the government’s ability to restore confidence to the stock market. |
| “After the storm, comes the rainbow,” said a commentary in People’s Daily, the Communist Party’s leading newspaper. Investors were mistaken to worry about the level of debt behind the rise in stock prices, it said. | |
| “What the broad numbers of investors need at this instant is confidence, not panic,” it said. | |
| In Hong Kong, where shares were down 3 percent in late trading, investors were paying considerably more attention to China than Greece. | In Hong Kong, where shares were down 3 percent in late trading, investors were paying considerably more attention to China than Greece. |
| “The Greek referendum should not influence too much the Asian stocks — the actions of China, with its huge economy, will have more impact,” said Roger Lam, a 63-year-old retired office worker, as he watched computer monitors at a downtown stock brokerage house. “Anyone who says China does not have the ability to hold up the stock markets in China is a fool. They have just not seen the mighty power of the Chinese government.” | “The Greek referendum should not influence too much the Asian stocks — the actions of China, with its huge economy, will have more impact,” said Roger Lam, a 63-year-old retired office worker, as he watched computer monitors at a downtown stock brokerage house. “Anyone who says China does not have the ability to hold up the stock markets in China is a fool. They have just not seen the mighty power of the Chinese government.” |