Tue, Jul 07, 2015 page15

• Asian markets plunge on Greek vote

  SAY ‘NO’: Despite concern over a potential Greek exit from the eurozone, the euro trended up early yesterday after Greece’s finance minister announced his resignation

  • AFP, HONG KONG
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  Asian equities fell yesterday after Greece overwhelming rejected further austerity measures, pushing it closer to a eurozone exit, while Shanghai underwent another day of volatility as China introduced a raft of measures to shore up the slumping market

  Despite growing concerns about Athens’ place in the eurozone, the single currency rallied after Greece’s combative Finance Minister Yannis Varoufakis announced his shock resignation just hours after winning Sunday’s referendum.

  Tokyo fell 2.08 percent, or 427.67 points, to 20,112.12; Seoul shed 2.4 percent, or 50.48 points, to 2,053.93; and Sydney lost 1.11 percent, or 61.6 points, to 5,476.70.

  Shanghai soared 7.82 percent at the open before sinking rapidly again — losing almost 1 percent briefly in the afternoon. However, it ended the day 2.41 percent higher, adding 89 points, to 3,775.91.

  Hong Kong plunged 3.18 percent, or 827.83 points, to 25,236.28 — wiping out a 0.7 percent rise in the opening minutes that came on the coat-tails of the mainland gains.

  Wellington dropped 1.1 percent, or 64.28 points, to 5,776.62; and Manila fell 1.06 percent, or 80.15 points, to 7,455.15.

  More than 60 percent of Greek voters heeded the government’s call to vote “No,” brushing aside warnings from European leaders that it was effectively an in-out poll on the euro.

  Greek Prime Minister Alexis Tsipras had campaigned against accepting debt reform proposals from its creditors — the European Central Bank, the European Commission and the IMF — claiming a “no” vote would strengthen his hand in negotiations.

  While the euro sank to US$1.0963 in US electronic trade immediately after the poll, it recovered throughout yesterday and ticked even higher after Varoufakis’ announcement.

  The euro traded at ￥135.45 compared with ￥134.91 in the US.

  “There’s nothing we can do now except lower our risk and wait,” Sumitomo Mitsui Trust Bank strategist Ayako Sera told Bloomberg News.

  “The euro was created based on this great dream of a unified Europe, and if they withdraw from the euro then the whole system is going to come into question,” Sera said.

  The US dollar weakened to ￥122.52 from ￥123.05 on Friday.

  A series of high-level meetings were hastily arranged across the continent, with German Chancellor Angela Merkel and French President Francois Hollande calling a European summit today.

  German and French finance ministers were set for talks in Warsaw yesterday, while the Euro Working Group of top treasury officials were to meet in Brussels.

  The European Central Bank is also to consider a financial lifeline for Greek lenders, which have been closed under capital controls since last weekend.

  Tokyo-based Nomura Securities currency analyst Shinya Harui said: “I personally think the chance [of the Greek exit] is very high, at around 70 to 80 percent.”
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