Euro zone shares fall nearly 2% after Greek 'no'

Reuters | Updated: Jul 6, 2015, 12:54 PM IST

An investor is reflected in a glass window in front of a screen displaying share prices at a security firm in Shanghai on July 6, 2015. Shanghai stocks were up 2.15 percent at midday on July 6 after the government unveiled its biggest package of measures so far to shore up the slumping market, but an initial surge was pared as analysts questioned their effect.

J.P.Morgan economists reckon the outcome of Sunday's referendum will probably hasten Greece's exit from the euro.

Top euro zone shares fell 1.7% in early trading on Monday after Greek voters rejected austerity measures demanded in return of a debt deal, raising concerns about the country's possible exit from the euro zone.Banks were the worst hit, with the Euro STOXX banks index down 2.3%. Italian banks including Unicredit were down 3 to 4% while Portugal's Banco Comercial Portugues fell 3%.J.P.Morgan economists reckon the outcome of Sunday's referendum will probably hasten Greece's exit from the euro.

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Monday's fall was not as strong as some had expected, however, considering markets had been betting on a rapid resolution going into the weekend."Markets have yet to be convinced in full either that the (Greek) exit door will be open or that the extent of any contagion from this could be irreparably damaging to the system," said Neil Williams, chief economist at HermesInvestment Management.