ROME:European stocks fell after Greek voters rejected creditors’ austerity demands, while a measure of volatility slid amid speculation that the resignation of Finance Minister Yanis Varoufakis will smooth further talks.
The Stoxx 600 retreated 0.8 percent to 380.52 at 10:28 a.m. in London, after earlier losing as much as 1.6 percent. That compares with the 2.7 percent drop of June 29, the first trading day after Greek Prime Minister Alexis Tsipras announced the vote on austerity demands. The VStoxx Index of volatility expectations for the Euro Stoxx 50 Index slipped 8.6 percent today. The volume of shares changing hands on the Stoxx 600 was 18 percent higher than the 30-day average.
“Greece is not a driver of the equity market as it was in 2012,” said Tristan Abet, a strategist at Louis Capital Markets in Paris. “Today in 2015, there is no longer systemic risk. The ‘cyclical upswing’ in the rest of Europe is intact and inflation rates are recovering. It is not really necessary to buy protection because markets are resilient.”
Montaigne Capital fund manager Arnaud Scarpaci said Varoufakis’s resignation will help negotiations toward an eventual agreement with creditors. The finance minister announced the decision in a blog post early Monday, saying there was “a certain preference” among European creditors that he no longer be involved in talks.
Italy’s FTSE MIB gauge lost 2.4 percent, Portugal’s PSI 20 Index dropped 2.2 percent and Spain’s IBEX fell 1.7 percent. The Greek exchange has been closed since June 29 as the country shut its banks and imposed capital controls to shore up its financial system. Banca Monte dei Paschi di Siena SpA dragged a gauge of European lenders to the worst performance on the Stoxx Europe 600 Index, with a 6.2 percent slide.
