The turmoil in Greece hit European stocks this morning, with the FTSE 100, Germany's Dax and France's Cac all opening lower.
The FTSE was two per cent lower, while Germany's Xetra Dax was down 3.7 per cent and France's Cac 40 was four per cent lower.
That followed a torrid night of trading in Asia, where the Nikkei closed 2.8 per cent down, while the Hang Send fell 2.7 per cent and the Sensex dropped 1.9 per cent.
However, the euro held up relatively strongly against the dollar, sliding just 0.74 per cent to $1.1084 in the early morning
Meanwhile, as capital controls were imposed in Greece, the country's stock exchange remained closed, as did its banks.
"The crisis is upon us," said analyst Naeem Aslam this morning.
"The financial markets are like a tornado today, all they want is to punish every single person on who believes that 'Greece doesn't matter'. It was the most difficult weekend for investors since the Lehman crisis and every element of worry is picking up more speed and more destruction today."
"It's a straight 'yes or no' situation," added Accendo Markets' Mike van Dulken.
"We’ve got a creditor refusal to extend the bailout for a further five days, the European Central Bank (ECB) keeping the current Emergency Lending Assistance (ELA) limit unchanged and a likely technical default on Tuesday if the IMF is not paid.
"But don’t panic, apparently. The euro has plunged to its lowest level against the (global reserve currency) US dollar since 2 June while losing 2 per cent against the safe-haven Yen. Is Greek PM Tsipras (elected by the people) essentially chickening out and asking the people to take social responsibility for a Grexit?"