Irish and European stocks fall after Greece referendum
Irish and European stocks fell this morning on the back of the "No" vote in the Greek referendum.
The ISEQ index of Irish shares was down 1.18pc at 8:05 am.
The FTSE 100 was down 1pc at 8:06, while in France the CAC 40 was down almost 2pc.
At 8:08, the German DAX was down 1.66pc.
But stocks rallied later in the morning - the ISEQ recovered to a 0.84pc dip at 8:45. In London the FTSE 100 had risen to a 0.73pc dip by 8:47, while the CAC 40 reached a 1.39pc dip at 8:48.
There was no rout and contagion was limited.
Investors sought low-risk assets including Bunds, but the yield premium of Italian 10-year debt over Germany remained below last Monday's eight-month highs.
Some bankers, including JPMorgan, said the vote made it more likely that Greece would leave the single currency. Other investors said the European Central Bank's response would be key to the extent of contagion.
"The market is, rightly or wrongly, taking a great deal of credence of the fact that the ECB has many more defence mechanisms in place than it did in 2011-12," said Andrew Milligan, head of global strategy at Standard Life Investments.
"Some of the measures we've seen already could be seen as a subtle signal by the ECB that it is ready to step up...this point of the ECB being ready to step in is very important to the market reaction we've seen."
Many traders and analysts had expected a closer result in Sunday's referendum or even a 'Yes'. In the event, more than 60 percent of those who voted rejected the conditions demanded by Greece's creditors.
"Markets have yet to be convinced in full either that the (Greek) exit door will be open or that the extent of any contagion from this could be irreparably damaging to the system," said Neil Williams, chief economist at Hermes Investment Management.
Yields on Italian, Spanish and Portuguese government bonds rose between 5 and 8 basis points. German 10-year yields fell 5.3 bps to 0.75 percent.
The yield gap between Italian and German 10-year bonds, at 158 bps, was below last Monday's eight-month high, which followed the collapse of talks between Greece and Eurozone leaders.
Meanwhile a Greek woman living in Ireland told RTE Radio 1 that she also "would have voted no" and "I would have campaigned for no as well".
"I think the people I was talking to [in Greece] are happy that there was a no vote," she told Sean O'Rourke.
"I got a sense of people feeling... that austerity needs to end... that people have suffered too much."
She said she "wasn't very surprised" at the resignation of Yanis Varoufakis as Greek finance minister as he had "kind of hinted that if he could help by resigning he would do so".