PERTH: The Australian sharemarket remains deep in the red at noon as investors brace for a possible Greek exit from the eurozone, after the country’s government said it would extend a bank closure to six days.
The closure of Greece’s banks, after the government called on voters to reject terms put forward by its creditors in a referendum on Sunday, sent investors across Asia into a selling frenzy.
The Australian market opened lower, plunging by more than 2 per cent just after 11am (AEST), Tokyo’s Nikkei index fell 2.25 per cent at the start of trading in Japan, while in Hong Kong, the Hang Seng index dropped 1.41 per cent.
At 12.05pm (AEST), the benchmark S&P/ASX200 index was down 91.7 points, or 1.65 per cent, at 5,454.2, while the broader All Ordinaries index gave up 89.9 points, or 1.62 per cent, to 5,446.2.
The euro also took a hit, dropping through the $US1.1 mark for the first time since early June. The Australian dollar, meanwhile reached its lowest point in more than two months, falling to the low US76c range.
“This is now a rolling risk event,” IG market strategist Evan Lucas said. “Mitigation is all that can be done.”
Meanwhile, China is flirting with a technical bear market, Mr Lucas said, prompting a response from the People’s Bank of China, which cut the reserve requirement ratio on its banks for the fourth time in eight months.
