Asian stock markets sink after Greece closes banks

[webfact]

Asian stock markets sink after Greece closes banks
By JOE McDONALD and PAUL WISEMAN

BEIJING (AP) — Asian stock markets sank Monday after Greece closed its banks and imposed capital controls in a dramatic turn in its struggle with heavy debts.

Oil prices declined and the euro edged down against the dollar after Athens announced the moves to stanch the flow of money out of Greek banks and put pressure on creditors to offer concessions before a bailout program expires Tuesday.

The Shanghai Composite Index fell 3.7 percent to 4,035.48 points despite China's surprise weekend interest rate cut. Tokyo's Nikkei 225 index shed 2.4 percent to 20,218.17 points.

Hong Kong's Hang Seng lost 2.7 percent to 25,949.30 and Sydney's S&P ASX-200 was off 2.3 percent at 5,418.80. Seoul's Kospi dropped 1.4 percent to 2,061.00 and India's Sensex declined 1.6 percent to 27,370.30. The euro slipped to $1.101 from the previous session's $1.116. The dollar declined to 123.15 yen from 123.89 yen.

Greece's Cabinet closed banks for six business days and restricted cash withdrawals. The Athens Stock Exchange was due to be closed Monday. That follows Prime Minister Alexis Tsipras' weekend decision to call a referendum on European and International Monetary Fund proposals for Greek reforms in return for bailout funds.

The accelerating crisis has raised questions about whether Greece might withdraw from the 19-nation euro currency, a move dubbed Grexit.

"Even if a deal is somehow reached, the ability of Greece to implement agreed reforms is doubtful," said IHS Global Insight economist Rajiv Biswas in a report.

Greek withdrawal from the euro could lower Asian economic growth by 0.3 percent next year due to disruption in trade and financial markets, Biswas said.

Globally, Greece's brinksmanship with its creditors is unlikely to have as severe an impact as the financial panic set off by the collapse of Lehman Bros. in September 2008, economists said.

"Today, the European banks have shed much of their Greek debt and they have significantly increased their capital," said Mark Zandi, chief economist at Moody's Analytics.

"A Greek default and exit from the euro zone would be devastating to Greece's economy, but no one else's," said Zandi. "So, the Greek standoff will be disconcerting to financial markets, but only temporarily."

The European Central Bank has vowed to do whatever it takes to prevent a financial panic.

The ECB is a committed to buying 60 billion euros a month in bonds to push down interest rates and help euro zone economies. It could buy more and flood financial markets with cash to calm jittery investors.

"They stand ready to do whatever it takes," said Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics.

China's rate cut, the fourth since November, appeared to be aimed at reassuring investors after a plunge in share prices last week, rather than boosting economic growth, analysts said.

Beijing cut its benchmark lending rate by 0.25 percentage point and freed up money for lending by lowering the reserves banks are required to hold.

The timing is "rather market-friendly" and appears to be meant to "provide a support to the market sentiment," said Credit Suisse economists Dong Tao and Weishen Deng in a report.

In energy markets, U.S. benchmark crude declined 89 cents per barrel to $58.24 in electronic trading on the New York Mercantile Exchange. The contract shed 7 cents in the previous session to close at $59.63. Brent crude, used to price international oils, shed 78 cents to $62.48 in London.
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Wiseman reported from Washington, D.C.


-- (c) Associated Press 2015-06-29

[SheungWan]

Sink? The SET is down about 1.12%

[Ulic]

Some see a building tidal wave, I see ripples in the pond. That said, I don't have a crystal ball. The next month will be interesting.

Edited June 29, 2015 by Ulic

[ABCer]

Whatever will be - will be.

But one doesn't need a crystal ball to see what's coming when a Socialist Government is elected in any country.

Congratulations, Trojans!

[thailand49]

Good they deserve it.. they had their chance how many times!

[flyingdoc]

Wait 24 hours !

[uksomchai]

But ! But they promised to end austerity !

They promised !

[lostinisaan]

"A Greek default and exit from the euro zone would be devastating to Greece's economy, but no one else's," said Zandi

Honestly speaking, even when not living in Germany anymore, i couldn't think of a better decision to let them go, plus other countries, including Spain and Italy.

Nobody and I mean nobody was asking West German people if they wanted the Euro.Just saying West German people, because not too many East Germans had a plan what was going on.

Keeping in mind that the current Chancellor of Germany seems to have quite a few secrets.And she's from East Germany.......

"With Agitation and Propaganda you're responsible for brainwashing in the sense of Marxism," he said. "That was her task and that wasn't cultural work. Agitation and Propaganda, that was the group that was meant to fill people's brains with everything you were supposed to believe in the GDR, with all the ideological tricks. And what annoys me about this woman is simply the fact that she doesn't admit to a closeness to the system in the GDR. From a scientific standpoint she wasn't indispensable at the Academy of Sciences. But she was useful as a pastor's daughter in terms of Marxism-Leninism. And she's denying that. But it's the truth."

http://www.spiegel.de/international/germany/new-book-suggests-angela-merkel-was-closer-to-communism-than-thought-a-899768.html

Couldn't a Europe exist, while all countries have their own currency, without countries like Germany bailing out others?

Best would be to rethink the whole "system" and let Germany print their old currency that was never really weak.

Let the Greeks print their Drachmen, the Italians their Lira and stop that bullshit. What does Greece produce, beside Ouzo?

The Greek on this forum might have THE solution for his country, Khun Costas.

Edited June 29, 2015 by lostinisaan

[godden]

i predict mutti merkel is going to have a tizzy