Markets suffered across Asia on Monday as Greece shut down its banks for a week and implemented capital controls. Only in the first hour of Monday, more than $35bn was wiped off the Australian stock market.
With many international media reporting that Greece will default on a €1.54 billion ($1.69 billion) payment due to the International Monetary Fund on Tuesday, most stock markets have a hard start on Monday.
Oil prices declined with the euro edging down against the dollar, while Tokyo’s Nikkei 225 index fell 2% to 20,283.98 points. Hong Kong’s Hang Seng lost 1.7% to 29,192.67. Seoul’s Kospi shed 1.6% to 2,057.52 and Sydney’s S&P/ASX 200 was off 1.8% to 5,447.80. Market benchmarks in Taiwan, Singapore and New Zealand also fell hard.
Earlier the euro dropped more than 3% to 133.80 yen, its lowest level for five weeks. The common currency fell as much as 1.9% to $1.0955, its lowest level in almost a month.
After the Greek government decided to hold a referendum asking its citizens to vote YES/NO on the bailout deal offered to debt-ridden Greece by its creditors, the Governing Council of the European Central Bank made a decision Sunday to freeze the level of emergency liquidity assistance to Greek banks resulting in the implementation of capital controls.
The emergency liquidity assistance (ELA) currently stands at just under 90 billion euros ($100 billion), the Associated Press reported earlier Sunday.