European markets begin second day of falls as Greece confirms it won't make today's IMF payment deadline

 
Emma Haslett
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Demonstrators made their views felt in Athens yesterday (Source: Getty)

The FTSE 100 was 0.6 per cent down in late morning trading today, after Greece confirmed last night it will definitely miss today's 6pm deadline to pay the International Monetary Fund (IMF) €1.6bn (£1.1bn).

Read more: George Osborne vows to help Britons hit by Greek crisis

Meanwhile, although both the Cac and the Dax fell, their losses were rather less muted than yesterday, with the German index just 0.25 per cent down by late morning, while its French counterpart fell 0.05 per cent.

After a surprisingly moderate day yesterday, the euro fell 0.6 per cent against the dollar, to $1.1169. It fell 0.5 per cent against the pound to £0.71048.

All eyes are now on the potential outcome of a referendum, to be held on Sunday, in which Greeks will vote whether or not to accept a package of reforms set out by the country's creditors which will unlock another tranche of bailout money.

Late last night the Eurozone's three biggest countries warned that a "no" vote would set off a process which would result in a Greek exit from the single currency.

But Alexis Tsipras, the country's embattled prime minister, has urged people to reject the proposals "with all our strength".

"The Greek saga is at boiling point," said Naeem Aslam, chief market analyst at Ava Trade.

"If there is anything good going to come out of this useless, deadlock negotiation attempts, we are not very optimistic about this.

"Markets always represent a better opportunity when they make sense according to their fundamentals, which lay the foundation for them. However, if the forex market does not reflect the exact situation in the equity market, then you know that something is out of whack and you should wait for that to emerge rather than to commit your hard earn cash to this market.
"The fact is that the market has always been way too optimistic about the Greek deal and despite all the rumours in the market that Greece situation is all priced in the forex and the equity market, yet we have experienced a massive sell off yesterday and this spells out how much truth serum is in that argument."

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