Varoufakis resignation after Greek ‘No’ vote adds to market uncertainty

​The euro slumped and Asian markets lost ground on Monday, after the majority of Greeks voted against austerity. However, the European currency bounced back on news Greek Financial Minister Yanis Varoufakis is resigning.

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As of 5:10 GMT, the euro was trading at $1.1012 down from Friday’s $1.1114. However, the news that Varoufakis is leaving his post made the euro gather momentum, trading at $1.1069 at 5:55 GMT. All in all, the currency has lost half a percent on Monday against the US dollar by the time of the publication.

READ MORE: Varoufakis resigns as Greek finance minister 'to aid deal'

Asian Hang Seng (Hong Kong) and Nikkei (Japan) indexes have suffered the most on the Greek referendum news. The Hang Seng stopped trading with a 3.18 percent loss, the Nikkei closed with a 2.08 percent fall.

However, reaction across Europe has been more moderate with the French CAC 40 so far being the worst performer in the EU losing 1.3 percent on Monday as of the time this article was published. Investors tend to think even if Greece leaves the euro, the reaction will be limited.

“I am going to be the first to put my hand up and say I expected a much more aggressive reaction to a ‘no’ vote,” Chris Weston, chief market strategist at IG in Melbourne was quoted by the Washington Post. “It has to be said that despite markets adopting a definitive risk-aversion feel, the mood has felt quite calm and there is little panic,” he added.

Steven Major, the global head of fixed-income research at HSBC in London explained ‘No’ doesn’t necessarily mean a Greek exit from the eurozone.

A 'No' vote “doesn’t necessarily mean anything more than further discussions and more uncertainty. It doesn’t mean euro exit at all,” he told Bloomberg.

On Tuesday eurozone members will hold an emergency summit where they’ll discuss the Greek referendum result after the German and French leaders called for a meeting, EU President Donald Tusk said. Tusk and president of the European Commission Jean-Claude Juncker are expected to talk at a European Parliament session in Strasbourg on July 7 at 13:00 GMT.

After 100 percent of the Greek ballots have been counted 61.31 percent were against the debt agreement proposed by creditors. Investors fear a further chain of events could lead to irreversible consequences for the euro.