Australian shares followed risk assets lower after Italy's Prime Minister pledged to resign after voters rejected a constitutional reform package seen as a referendum on the nation's place in Europe.
At 1pm EST the ASX 200 was 48 points or 0.9% weaker at 5396 as the referendum result sent Asian equities, the euro, crude oil and US equity futures lower and pushed up the US dollar and other traditional havens. The euro hit a 20-month low and S&P 500 futures declined five points or 0.23% following Matteo Renzi's announcement that he will quit after failing to secure public backing for his plan to amend the Italian constitution. Separately, New Zealand Prime Minister John Key also announced his resignation, citing family reasons.
"The 'no' vote was priced in to a certain extent in advance, so I do not expect a freefall in the euro in the near term," Minori Uchida, chief currency analyst at the Bank of Tokyo-Mitsubishi, told Reuters. "But in the long run, this will delay progress in Italy's efforts to get rid of banks' bad debt."
China's Shanghai Composite slipped 0.99%, Hong Kong's Hang Seng 0.1% and Japan's Nikkei 0.56%.
Crude oil futures dropped 57 cents or 1.1% to US$51.11 a barrel. A short-lived rally in gold futures ran out of steam as the morning wore on. US gold futures were lately down $1.70 or 0.14% at US$1,176.20 an ounce. The dollar was buying 74.4 US cents.
Another bloody nose for the politicians. The people have spoken and once again the people are bloody angry. The market is down, but not majorly, in recognition that these macro 'shocks' tend to blow over in a day or two. Unless of course, Italian banks start failing - that would be serious, but then the public purse would be expected to bail them out. As a voter, you get the pineapple one way or the other. Trading: I'm crook and operating below capacity, so snagged a quick wage from NOX and tuned out.
