Eurozone Shares Drop After Greek “No” Vote

Banks suffered the most, as the Euro STOXX banks index fell by 2.1%. Italian financial institutions Intesa Sanpaolo and Unicredit both declined by over 3%, while French Societe Generale, German Deutsche Bank, and Spanish Santande decrease by approximately 2.5%. The Greek market continued to be closed today.

Yet today's drop was not as severe as many had predicted. Hermes Investment Management's Chief Economist Neil Williams stated, "Markets have yet to be convinced in full either that the exit door will be open or that the extent of any contagion from this could be irreparably damaging to the system."

Greece's votes against austerity is a new occurrence within the European Union. As the nation won't receive anymore emergency financial assistance from the European Central Bank, Greek banks may be left without funds in the next coming days.

EMEA Investment at State Street Global Advisors Head Bill Street commented, "From the market's perspective, we have a balanced view that the contagion effect is pretty much contained. There is room for further negotiations with creditors, but we are only talking about hours and days rather than weeks."

Street added, "We are still positive on Europe with regards to underlying fundamentals. We are positive on earnings and sales growth and are looking for continued earnings surprises. We are still positively exposed to risky assets in the eurozone and see this as a longer-term opportunity to remain invested in Europe."

(Source: Reuters)