Asian Equities and Euro Suffer at Greece’s Hands

Asian stocks and the euro stumbled on Monday after a Greek vote against austerity measures endangered its future in the single currency and raised the risk of a full-blown crisis in the euro zone.  U.S. equity futures dropped around 1.2 percent ESc1 though they were off early lows. Japan’s Nikkei .N225 share index fell 1.4 percent while MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.5 percent.

Bucking the global trend was China’s stock market as a salvo of rapid-fire support measures from Beijing over the weekend prompted a much-needed rally.  The CSI300 index .CSI300 of the largest listed companies in Shanghai and Shenzhen jumped 4.2 percent in early trade, while the Shanghai Composite Index .SSEC soared 5 percent.

The gains only recouped some of the recent steep losses and it was far from clear if panicky investors who borrowed heavily to speculate on stocks would refrain from selling.  While the early price action was choppy across Asia, dealers emphasized that markets were orderly with no signs of financial strain and many assuming the European Central Bank would step in with a pledge of extra liquidity at some point.

Reuters

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