(MENAFN- AFP) European stock markets fell on Monday after Greece rejected creditors' austerity demands in a weekend referendum and fears rose that it would crash out of the eurozone.
The CAC 40 in Paris fell 2.01 percent to 4,711.54 points, while Frankfurt's DAX 30 shed 1.52 percent to close at 10,890.63 points.
Milan's bourse plunged 4.03 percent to 21,601 points, while Madrid's stock exchange was down 2.22 percent to 10,540 points, its lowest level since February, and Lisbon's fell 3.81 percent.
Outside the eurozone, the FTSE 100 index lost 0.76 percent to end the day at 6,535.68 points compared with Friday's close.
In foreign exchange at around 1600 GMT the euro stood at $1.1075, down from $1.1107 late on Friday.
While the referendum was a victory for the Greece's leftist government, Yanis Varoufakis surprisingly resigned as finance minister, suggesting that he could be an impediment to future debt talks where the outcome is far from certain.
"Holding firm on their existing policy stance threatens to see Greek banks run out of money within days which would send Greece over the edge," said Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor.
Greek banks will remain closed until Wednesday with limits on daily withdrawals unchanged, the state news agency reported on Monday, citing officials.
- ECB talks -
Greece's voters decisively rejected international creditors' tough bailout terms Sunday, but Greek premier and Syriza party leader Alexis Tsipras insisted the result does not mean a "rupture" with Europe despite fears it will end in a "Grexit" from the eurozone.
Analyst Andreas Rees of Italian banking giant UniCredit was categorical, saying: "If Mr. Tsipras does not make serious concessions, Greece is leaving the eurozone."
Research firm Capital Economics was also morose, saying: "While a deal between Greece and its creditors may finally emerge in the next few days, it still looks unlikely to include the substantial debt relief needed to end the crisis and eliminate the risk of Grexit."
Tsipras and German Chancellor Angela Merkel spoke by telephone Monday and agreed that Athens would present new proposals to a eurozone summit on Tuesday, a Greek government source said.
In the final tally, 61.31 percent of Greeks rejected creditor demands for further austerity in return for more bailout funds.
All eyes were meanwhile on the European Central Bank, seen as the only institution capable of calming market panic and preventing the Greek economy from collapsing.
The ECB board of governors was to hold a conference call at 1600 GMT Monday.
Until now, the ECB has agreed to keep Greek banks afloat -- and, by extension, the debt-wracked Greek economy -- which is on life support through the eurozone's Emergency Liquidity Assistance or ELA facility.
The US market, reopening after a holiday ahead of the July 4 Independence Day festivities, posted limited losses following the Greek vote.
The Dow Jones Industrial Average stood at 17,704.19 points, down 0.15 percent in mid-day trade in New York.
The broad-based S&P 500 slipped 0.26 percent to 2,071.28, while the tech-rich Nasdaq Composite Index dropped 0.31 percent to 4,993.91.
Events in Greece sent Asian equities falling on Monday, while Shanghai underwent another day of volatility as China introduced a raft of measures to shore up the slumping market.
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