World stocks drift lower ahead of Greek vote; China plunges

AP News
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Posted: Jul 03, 2015 2:30 PM
World stocks drift lower ahead of Greek vote; China plunges

World stock markets mostly drifted lower Friday ahead of Greece's weekend referendum, while China's main stock benchmark plunged as government efforts failed to reassure panicky investors.

KEEPING SCORE: European stocks were mixed, with France's CAC 40 falling 0.6 percent to close at 4,808.22. Germany's DAX dropped 0.4 percent to 11,058.39. Britain's FTSE 100 declined 0.7 percent to 6,585.78. U.S. markets were closed in observance of Independence Day.

GREECE VOTES: Investors are awaiting the outcome of a weekend referendum in Greece on whether to accept more budget cuts in exchange for new bailout loans. The government says a "No" vote will put it in a better bargaining position for new terms, while European officials and the opposition say a rejection could lead to Greece's exit from the euro. Markets in Asia will get the first chance to react to the result of Sunday's vote.

CHINA SELL-OFF: A Chinese market rout deepened as investors dumped shares in spite of government measures this week aimed at restoring confidence, such as cutting fees and easing rules on borrowing money for trading. The China Securities Regulatory Commission, the market watchdog, said late Thursday that it's launching an investigation into suspected stock market manipulation, state media reported, an indication that the government is trying to halt the market slide.

ANALYST VIEWPOINT: "Policies take time to work their way through the system before sentiments can be more permanently altered," Bernard Aw of IG Markets in Singapore wrote in a commentary. "For now, the mood is verging on panic."

ASIA: The Shanghai Composite Index ended down 5.8 percent at 3,686.92. The index has plunged 29 percent since hitting a peak of 5,166.35 June 12. Hong Kong's Hang Seng fell 0.8 percent to close at 26,064.11, while Japan's Nikkei 225 edged up 0.1 percent to 20,539.79. South Korea's Kospi slipped 0.1 percent to 2,104.41 and Australia's S&P/ASX 200 retreated 1.1 percent to 5,538.30.

ENERGY: Benchmark U.S. crude fell $1.41 to $55.52 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, fell $1.75 to $60.32 a barrel in London.

CURRENCIES: The dollar fell to 122.78 yen from 123.09 yen late Thursday. The euro rose to $1.1100 from $1.1083.