Hong Kong (AsiaNews) – Asian stock markets dropped on Monday following the No victory in the Greek referendum on the Eurogroup’s proposal, eliciting no response from Asian government, except for Japan.
Overall, Asian shares responded better than their European counterparts, with the highest loss in Seoul (-2.5 per cent). The slide was compounded by Shanghai’s steady decline over several weeks and Wall Street’s holiday on Friday.
The Shanghai market leapt 7.8 per cent at the start, but then surrendered most of it. This comes after weeks of losses, following months of gains.
In Hong Kong, the Hang Seng index also reversed direction to slump 4 per cent. Tokyo fell 1.43 percent, Seoul shed 1.14 per cent (2.5 for its blue-chip share), Sydney lost 1.69 percent and New Zealand was off 0.77 percent.
On Sunday in New York, the euro was trading US$ 1.1020 and ¥ 135.05, up from US $ 1.0987 and ¥ 134.91. However, for analysts this was not due so much to Greece as to China.
China's top securities brokerages said on Saturday that they would collectively invest at least 120 billion yuan (US$ 19.3 billion) to help stabilise the country's stock markets.
The China Mutual Fund Association said 25 fund companies pledged on Saturday to buy shares. Another 69 fund firms said on Sunday they would do the same.
Also on Sunday, state-owned investment company China Central Huijin said it had recently been buying exchange-traded funds and would continue to do so.
However, Beijing’s action proved less effective because Wall Street was closed on Friday, eve of America’s Independence Day, with many investors staying away from Shanghai.
Despite the gravity of the situation, Asian governments have been silent on the matter, except for Japan, which is ready to act in response to the Eurozone crisis and Grexit.
"The direct economic and financial relations between Japan and Greece are limited. But government and Bank of Japan officials have held discussions early this morning" to ensure Japan responds smoothly to any market response as needed, Bank of Japan Governor Haruhiko Kuroda said in a statement.
Finance Minister Taro Aso also said that while Japan was in close contact with overseas policymakers on the Greek referendum, it was confident that Europeans have sufficient safeguards in place to respond to market disruptions.