By 8:25am (AEST) the Australian dollar had bounced slightly from its morning low of 74.52 United States cents to be worth 74.9 United States cents.
There remained an air of complacency over the sharp rise in contagion risk from Greece exiting the eurozone as ASX volume tumbled to 35 per cent below average as most investors preferred to sit on their hands rather than the sidelines.
Rejecting European creditors’ demands, Greeks voted against the terms of a bailout on Sunday, delivering one of the biggest blows to Europe’s drive to forge an enduring monetary union since the euro was launched in 1999.
Investment bank JP Morgan now says there is a two-in-three chance of the country leaving the euro zone. “We lurch from one near-death experience to the next”, Spooner said.
“This is a path that suggests to us that there is now a high likelihood of Greek exit from the euro, and possibly under chaotic circumstances”, it said in a research note.
Meanwhile, the Australian bond market was firmer at noon.
“Trade will be highly volatile as managers close out the month, quarter and year with Greece and China as an overlay”, said IG Markets’ strategist Evan Lucas.
All major sectors of the local market were in the red with the exception of gold miners, which tend to do well during periods of uncertainty due to the metal’s safe haven status.
With Greece a fast-moving scenario and China suspending all new IPO listings among a raft of measures to prop up its markets, he added that it was hard to know where stocks would end the day. “However, how China reacts is unknown”, he said.
Eurozone nations will hold a summit on Tuesday to discuss the referendum result, after the German and French leaders called for a meeting.
BHP Billiton was down 61 cents at $25.96, Rio Tinto had lost $1.23 to $51.29 and Fortescue Metals was seven cents weaker at $1.75.
Commonwealth Bank was down 88 cents at $85.78, Westpac had retreated 42 cents to $32.34, National Australia Bank had lost 27 cents to $33.44 and ANZ was 32 cents lower at $32.13.
In other stocks, energy giant AGL had lost 46 cents, or 2.91%, to $15.36 after it flagged another $600m in writedowns as it looks to cast off parts of its gas business.