Almost $40 billion has been wiped off the Australian share market as investors brace for a possible Greek debt default and exit from the eurozone.
Both the S&P/ASX 200 and All Ordinaries have finished the day more than two per cent lower in one of the worst falls in the past two years.
Heightened fears of a Greek default and its possible exit from the euro monetary union have sparked a risk-off sentiment, Australian Stock Report head of research Chris Conway said.
“Investors and traders alike have wanted to sell down risk and move to the sidelines,” he said.
“And until there is an outcome in Greece, whether that be funding is supplied to Greece and they remain in the eurozone or whether they end up defaulting and exiting the eurozone, the selloff is likely to continue.”
European Union and International Monetary Fund negotiators have rejected Greece’s request to extend a bailout offer past Tuesday’s deadline for a debt servicing payment.
Greek Prime Minister Alexis Tsipras has shocked markets by calling a July 5 referendum on its creditors’ austerity measures.
The impasse has heightened fears of a default by Greece and its possible exit from the euro monetary union.
Australia’s major banks all tumbled by at least two per cent, with ANZ and Westpac suffering the heaviest falls of about three per cent.
ANZ dumped $1.03 to $32.07, Westpac declined 99 cents to $32.02, Commonwealth Bank fell $1.96 to $84.69 and National Australia Bank was down 89 cents at $33.20.
As for the major miners, BHP Billiton was down 55 cents at $26.95, Rio Tinto shed 79 cents to $53.29 and Fortescue Metals was six cents weaker at $1.93.
Gold stocks were the only sector to finish in positive territory with gold miner Newcrest up 15 cents at $13.12, OceanaGold up 21 cents at $3.35 and Evolution Mining up 4.5 cents at $1.205.
Shares in law firm Slater and Gordon tumbled 25 per cent, or $1.26, to $3.78 as investors dumped the stock after it admitted to problems with its UK business’ accounts.
KEY FACTS
* At 1615 AEST on Monday, the benchmark S&P/ASX200 index was down 123.4 points, or 2.23 per cent, at 5,422.5 points.
* The broader All Ordinaries index was down 119.5 points, or 2.16 per cent, at 5,416.6 points.
* The September share price index futures contract was down 134 points at 5,366 points, with 40,658 contracts traded.
* National turnover was 1.67 billion securities worth $4.62 billion.
