Asian Stocks Slide as Greece ‘No’ Vote Raises Risk of Euro Exit

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Asian stocks fell, with the regional benchmark index set for its biggest drop in more than a year, after Greece voted to reject further austerity. Hong Kong’s Hang Seng Index entered a correction.

Asahi Glass Co., which gets about 21 percent of sales from Europe, dropped 2.6 percent in Tokyo. BHP Billiton Ltd., the world’s biggest mining company, slipped 2.2 percent in Sydney. Chinese brokerage Guolian Securities Co. plunged 31 percent in the worst major Hong Kong trading debut this year. Hong Kong Exchanges & Clearing Ltd. slumped 9.6 percent.

The MSCI Asia Pacific Index slid 2 percent to 143.52 as of 4:12 p.m. in Hong Kong, heading for the biggest decline since February 2014. Sixty-one percent of voters backed Greek Prime Minister Alexis Tsipras’s rejection of further spending cuts and tax increases in an unprecedented referendum that’s also taken the country to the brink of financial collapse. Greece exiting the currency union is now the base scenario, JPMorgan Chase & Co. said. Japan’s Topix index sank 1.9 percent as the yen gained as much as 2 percent against the euro.

European Union President Donald Tusk called a euro-area summit for Tuesday. While the European Central Bank’s Governing Council is due to talk on Monday on whether to keep supporting Greece’s lenders, it’ll probably be reluctant to preempt such a meeting.

“There’s a whole range of unpredictable outcomes,” Mark Lister, head of private wealth research at Craigs Investment Partners Ltd. in Wellington, which manages about $7.2 billion, said by phone. “It’s surprising that the ‘no’ vote won so convincingly, certainly more decisively than the polls had suggested. This puts us in limbo for so much longer, and it’s very negative for risk sentiment especially when you add in what we’re seeing with developments out of China.”

China Measures

Most Chinese stocks fell as a fresh round of government support measures failed to spark gains outside the largest state-run companies. More than two shares dropped for each that rose on the Shanghai Composite Index, which closed 2.4 percent higher. The ChiNext measure of smaller companies sank 4.3 percent, while the Shenzhen Composite Index retreated 2.7 percent.

China suspended initial public offerings and brokerages pledged to buy shares in weekend measures aimed at halting the market rout. Mainland shares posted their biggest three-week slump since 1992 on concern leveraged traders are liquidating bets after valuations exceeded levels seen during China’s stock-market bubble of 2007.

Hong Kong’s Hang Seng Index tumbled 3.2 percent, bringing losses from its April 28 peak to 11 percent, entering what some traders define as a correction. South Korea’s Kospi index sank 2.4 percent. Taiwan’s Taiex index, Australia’s S&P/ASX 200 Index and New Zealand’s NZX 50 Index each fell 1.1 percent. Singapore’s Straits Times Index dropped 0.4 percent.

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