European stocks slide at open after Greek 'No' vote

GMT 08:42 2015 Monday ,06 July

Arab Today, arab today European stocks slide at open after Greek 'No' vote

A man holds a Greek national flag
London - AFP

European stock markets slid at the start of trading on Monday after eurozone member Greece rejected creditors' austerity demands in a weekend referendum.

Frankfurt's DAX 30 shed 2.11 percent to 10,825.06 points and the CAC 40 in Paris fell 2.06 percent to 4,709.01 points. Outside the eurozone, the FTSE 100 index lost 1.07 percent to stand at 6,515.67 compared with Friday's close.

The vote result has fuelled fears the country will crash out of the eurozone, but the euro rallied after Finance Minister Yannis Varoufakis announced his shock resignation.

While the referendum was a victory for the government, Varoufakis suggested he could be an impediment to future debt talks.

"Fear of the unknown, following the decisive Greek rejection of austerity, has seen global stock markets drop -- however the freefall that was predicted has not materialised," said Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor.

"The relatively subdued reaction from the equity and bond markets belies the difficult position that European leaders find themselves in. Any significant compromise by Europe towards Greek debt forgiveness runs the risk of causing a dramatic change in European politics if extreme left-wing parties in Spain and beyond choose to follow Syriza's tactics.  

"However, holding firm on their existing policy stance threatens to see Greek banks run out of money within days which would send Greece over the edge," O'Keeffe added.

Greek voters overwhelmingly rejected international creditors' tough bailout terms Sunday, but premier and Syriza leader Alexis Tsipras insisted the result does not mean a "rupture" with Europe despite fears it will end in a "Grexit" from the eurozone.

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