Asia markets' Grexit bloodbath: Stocks, FX, metals
The shock results from Greece's referendum on Sunday sent markets into a tailspin during Asian trade on Monday, with U.S. crude suffering the biggest declines.
Athens has denied that the 'no' vote could lead to an exit from the euro zone, but experts remain unconvinced.
The increased probability of a 'Grexit' has moved above 50 percent for the first time and that could see a risk-off mood prevail, according to ING.
Wolfgang Piccoli, managing director at Teneo Intelligence, told CNBC in Athens that the likelihood of a Grexit stood at 75 percent, from 15 percent previously. "We're running short of time. We have bank flows, capital controls, the Prime Minister stronger than ever who will go to Brussels asking for more concessions....meanwhile, the other side thinks he has zero credibility, even less now that he won the referendum."
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Read More A guide to the next big turning points in Greece
Asian indices declined on Monday, but mainland markets bucked the regional downtrend.
The Shanghai Composite (Shanghai Stock Exchange: .SSEC) surged 7 percent at the open before paring gains to 1 percent as investors cheered the latest measures to stop the recent bleeding in mainland equities. Over the weekend, several brokerages committed $19 billion collectively to help stabilize the market while 28 firms suspended plans for initial public offerings. In recent weeks, policymakers have enacted a raft of actions, including a loosening of margin lending rules and a fourth interest rate cut in six months, to halt the benchmark's 30 percent crash in the past month.
But Hong Kong's Hang Seng Index (Hong Kong Stock Exchange: .HSI) reversed opening gains and tumbled nearly 3 percent, leading losses in Asia, as deepening fears over Greece overshadowed optimism over Shanghai's rebound.
The Nikkei (Nihon Kenzai Shinbun: .N225) dropped 1.6 percent, weighed down by exporters and major banks, even as Bank of Japan (BoJ) Governor Kuroda pledged to take action against volatile trade. Early Monday, Kuroda said Japanese financial institutions have minimal exposure to Greek debt, adding that discussions were held with the government to ensure a smooth market response but didn't specify what kind of action the bank could take.
In Australia, sharp losses in heavyweight mining stocks like BHP Billiton (London Stock Exchange: BLT-GB) and Fortescue Metals (ASX: FMG-AU) dragged the benchmark S&P ASX 200 (ASX: .AXJO) more than 1 percent lower. Experts pointed to China as a more influential factor than Greece, seeing as the world's second largest economy is Canberra's primary trading partner.
Nymex crude suffered a more than 3 percent loss at $54.44 a barrel while Brent crude traded down 1 percent to $59.35 a barrel. Worsening the bearish mood was data last week showing that U.S. drilling rose for the first time after 29 weeks of declines, Reuters reported.
Demand for safe-haven gold fizzled out by the late morning session, with the precious metal trading flat after jumping as much as 0.6 percent earlier.
Industrial metals fell across the board. Copper, widely regarded as a key indicator of economic trends, slumped 2 percent to a three-month low on the London Metal Exchange. Meanwhile, aluminum, lead and zinc were all 1 percent lower.
The euro (: EUR1M=) was at the heart of currency market spikes, dropping as much as 1 percent against both the yen and dollar, but managed to move off session lows. It touched a six-week trough at 133.67 yen as the safe-haven currency rallied and briefly hit $1.0967 against the greenback - near a one-month low of $1.0955 hit last week.
The Australian dollar (Exchange: AUD=) hit a six-year low at $0.7448 before trimming losses. Analysts believe the currency could head even lower on the prospect of a looming rate cut from the Reserve Bank of Australia (RBA).
"The treat of competitive easing looks likely to continue. With the PBoC cutting lending rates the previous weekend, the RBA may in turn be persuaded to follow suit. Together with RBNZ's move in early June, RBA governor may be forced to move again on Tuesday- against the market's expectations," said Nicholas Teo, market analyst at CMC Markets.
Amid safe havens, the yen (Exchange: JPYSE=) rose as high as 121.72 per dollar while the Swiss franc (Exchange: CHF=) firmed 0.4 percent.
The Malaysian ringgit (Exchange: MYR=) dropped nearly 1 percent as the euro's slide added to fears over domestic political instability. A Wall Street Journal report last week noted that $700 million from troubled state fund 1MDB was deposited into Prime Minister Najib Razak's personal bank account.
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