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Investors Watch Europe

Global markets tumble as wait and see attitude comes to an end with Greece teetering on the edge of default. The country shut lenders and imposed capital controls ahead of a 5 July referendum on creditor- demanded austerity measures, adding to the uncertainty surrounding the probability of a Greece exit. Meanwhile rhetoric from European leaders suggests they are sticking to their austerity demands and are turning the referendum into a vote on Greece’s Eurozone membership.

US stocks retreated as investors watch Europe

US stocks pare back as uncertainty mounts amid Greece concerns. At the time of writing the S&P 500 had lost -1.3% while the Dow Jones Industrial Average had slumped -1.4%.

Financial stocks were among the worst performers with Charles Schwab and Bank of America pacing losses, down -3.7% and -2.5% respectively, while Metlife and Prudential lost -2.8% and -3.2% respectively. Macy’s declined -2.4% following a rating cut on the back of weaker sales forecasts. Fiat Chrysler, which counts more than a quarter of its revenue from Europe, sank -6.4%.

European stocks plunged Greece teeters on default

The Stoxx Europe 600 tumbled -2.7% as Greek debt talks fell apart with trading levels well above the 30-day average. Trading on the Athens Stock Exchange will be suspended until 6 July although Greek stocks listed elsewhere plunged with the National Bank of Greece plummeting -24.2% in New York. Financial stocks led declines as the uncertainty weighed on peripheral equities with Banco Comercial Portugues, Banca Monte dei Paschi di Siena and Banco Popular Espanol plunging -10.6%, -10.2% and -7.2% respectively. Automakers followed financial shares with Daimler and BMW slipping -4.6% and 4.1% respectively.

The UK’s FTSE 100 slumped -2.0% as the probability of a Greece exit increases. TUI sank -7.1% on reports that some of the tourism company’s customers were among the victims of the attack in Tunisia. Royal Dutch Shell and BP dropped -2.1% and -2.3% respectively to track crude prices lower.

Asian equities declined as global uncertainty weighed on indices

The MSCI Asia Pacific Index led the global movements, retreating -2.1% amid Greek fuelled uncertainty.

Japan’s Topix sank -2.5% with the yen strengthening. Financial stocks were the worst performers on the index with Mizuho, Mitsubishi UFJ Financial and Dai-ichi Life retreating -3.6%, -3.2% and -3.5% respectively. Nintendo and Makita slid -3.6% and -4.1% both companies rely on European revenue.

ASX 200 down

The ASX 200 slid -2.2% as investors watch Europe.

Crude down, gold up

WTI crude fell -2.0% to US$58.46 while gold rose +0.3% to US$1,178.77.



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