Australian shares endured their second-worst day of the year as the weekend's news of a Greek debt referendum and the imposition of capital controls sparked a broad-based $38 billion sell-off, with gold stocks the only beneficiaries from the uncertainty.
The
All Ordinaries fell 2.1 per cent to 5416.6 and the ASX200 fell 2.2 per cent to 5422.5, the steepest decline since early May.
It was also a
sea of red around Asian sharemarkets, with the Shanghai Composite Index losing 2.25 per cent in late trade, after earlier plunging as much as 7.6 per cent, while Japan's Nikkei lost nearly 3 per cent.
"The markets are stressing – markets hate uncertainty," Equity Trustees head of asset management. "The Grexit is creating uncertainty and the market is having a hissy fit.
"What the market is looking for is a strategy from the Europeans that if the Greeks do something stupid they will have a plan to handle it – a plan B.
"The market will be volatile for the rest of the week. It will react to every bit of news. It will be jumping at shadows until something sorts itself out."
Credit Suisse analyst Damien Boey said the imposition of Greek capital controls on banks, rather than Greek debt, was now the main concern for global markets. "If you've got Greek banks under capital controls or at risk of becoming illiquid, you have a problem with the broader banking infrastructure in the world. If you don't know whether the Greek banks are going to be around tomorrow, then who's exposed to them? The underlying issue is liquidity.
"There's going to be much more volatility to come. You can't say the risk has been priced in because we don't even know what the risk is yet."
http://www.smh.com.au/business/greek-debt-crisis-sparks-vicious-asx-selloff-20150629-gi0ab2.html
