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Aussie stocks likely to open 1% lower on Greek vote

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The Australian share market is tipped to open as much as one per cent lower on Monday as jittery investors await the outcome of the Greek parliament’s crucial vote on a 130 billion euro ($A160 billion) bailout deal to stave off bankruptcy.

On the ASX 24, the March share price index futures contract was 19 points, or 0.45 per cent, lower at 4,199 points by Sunday after major US and European indices sold off on Friday.

US stocks fell on fresh doubts over Greece’s debt deal, with the Dow Jones Industrial Average closing down 89.23 points, or 0.69 per cent, at 12,801.23.

The broader Standard & Poor’s 500 fell 9.31 points, or 0.69 per cent, to 1,342.64, while the Nasdaq Composite dropped 23.35, or 0.80 per cent, to 2,903.88.

Debt-stricken Greece does not have the money to cover a 14.5 billion euro ($A18 billion) bond repayment on March 20, and must reach a vital debt-relief deal with private bond investors before then.

The vote on the bailout deal will take place on Monday morning AEDT, and includes an austerity package of budget, wage and pension cuts, including a mass layoff of 15,000 public sector workers.

Greece’s woes would hit investors in Australia and Asia on Monday, Peter Esho, chief market analyst at City Index, said.

“It will cause jitters when our market opens tomorrow and (jitters) in Asia.

“You’ve got weak offshore leads, more social and political headwinds coming out of Greece and I think we’ll probably open half to one per cent lower.”

The impact of the Greek vote would depend on its effect on the euro against the US dollar, which was a key measure of market confidence, he added.

“If we see a big pull back in the euro then traders will be pricing in a financial delay and financial fears.”

The euro-US dollar exchange rate closed at 1.3201 on Friday.

Local traders would act cautiously and get early indications of the vote’s impact from the direction of the Dow Jones futures contract, CommSec chief economist Craig James said.

“I don’t think we’re going to sell off to any great magnitude … but nobody’s going to be wanting to buy.”

A raft of economic and corporate news will flood the market this week, with the Australian Bureau of Statistics’ (ABS) labour force figures for January the most significant.

“If we did get a drop in jobs and hours worked, clearly that will push the Reserve Bank of Australia (RBA) a little bit closer to cutting interest rates,” Mr James said.

“Employment is the key data set (for the RBA). The prior month we lost 50,000 jobs,” Mr Esho said.

Banks and financial stocks will be in focus, with Commonwealth Bank reporting first half earnings on Wednesday, and Westpac and ANZ reporting first quarter earnings later in the week.