LONDON (AP) — Stock markets and oil prices fell Monday after Greece's voters overwhelmingly rejected reform proposals from international creditors, a verdict that's reinforced fears the country may be heading out of the euro currency.
Still, the market declines are not as dramatic as many had feared, something analysts are crediting to the resignation of the Greek finance minister, which might help bailout talks resume.
In Sunday's referendum on creditor proposals, 61 percent of Greeks voted "no" — a much higher proportion than anticipated. Many in the markets fear that the decision has pushed Greece one step closer to the euro exit door. So-called "Grexit" is considered to be one of the biggest risks facing the global economy.
"The prospects of Greece remaining in the eurozone have suffered a setback," said Bill O'Neill, Head of the U.K. Investment Office at UBS Wealth Management. "A deal to keep Greece in the eurozone remains possible, but the odds against a successful conclusion have now lengthened."
In Europe, Germany's DAX fell 1.4 percent to 10,908 while the CAC-40 in France fell 1.6 percent to 4,730. The FTSE 100 index of leading British shares was 0.5 percent lower at 6,553. Wall Street was poised for some losses at the open with both Dow futures and the broader S&P 500 futures down 0.7 percent.
There was little evidence Greece's troubles might affect other eurozone countries imminently, with government borrowing rates for Italy and Spain rising only marginally.
Oil markets, however, took a big hit. The benchmark U.S. contract tumbled $2.72 to $54.21 a barrel in electronic trading on the New York Mercantile Exchange.
With Greek banks still shuttered and the European Central Bank under pressure to stop its emergency liquidity measures, Greece may not have long to secure a deal with creditors. A meeting of the eurozone's 19 leaders has been called for Tuesday and it seems the creditors are expecting Greece to offer new proposals to restart talks.
Some hopes for progress in the talks grew Monday after Greek Finance Minister Yanis Varoufakis quit. His replacement, who has yet to be announced, may help unblock discussions with peers in the eurozone. Finance ministers also meet on Tuesday.
Over months of negotiations, Varoufakis' relations with his peers in the 19-country eurozone had deteriorated significantly. Traders say his resignation may offer a glimmer of hope of easing negotiations between the Greek government and its creditors.
"The fact that Varoufakis has resigned hints that the Greek government may at least be offering an olive branch given his reputation for using aggressive terms such as 'water-boarding' to describe the creditors' actions," said Jane Foley, a senior currency analyst at Rabobank International.
The euro was up 0.4 percent on Monday, at $1.1042, after falling on Sunday.
Earlier in Asia, China's benchmark, the Shanghai Composite index, rebounded from last week's heavy losses after regulators and the securities industry intervened to prop up the markets, closing 2.4 percent higher at 3,775.91.
Elsewhere, Japan's Nikkei 225 stock index dropped 2.1 percent to 20,212.12, while Hong Kong's Hang Seng sank 3.4 percent to 25,190.18. South Korea's Kospi fell 2.4 percent to 2,053.93.