MONDAY MARKET CLOSE: Stocks tumble amid Greek debt deadlock

Shares fell sharply as the deadlock over Greece’s debt talks saw the country’s banks shut their doors as it prepares for a referendum that will effectively decide whether to stay in the euro.

London Stock Exchange building. Picture: Getty

Athens is due to make a €1.6 billion (£1.1bn) payment to the International Monetary Fund tomorrow – the same day that its current bailout expires – having held months of talks with the fund and its other creditors, the European Central Bank and European Commission.

Jasper Lawler, analyst at CMC Markets UK, said: “Markets have clearly priced in the increased risk of a Grexit, but looking ahead to the referendum on Sunday, odds are probably in favour of Greeks voting to stay in the euro. A ‘yes’ vote would see Athens heading back to the negotiation tables with a softer mandate on austerity. This might enable Greece’s politicians to accept terms put forth by creditors that they weren’t able to previously.”

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The FTSE 100 Index tumbled 133.22 points, or 2 per cent, to close at 6,620.48, its lowest level since the start of the year.

Defensive commodity stocks were among the few sectors making any gains, with gold miner Randgold Resources up 26p to 4,400p and silver miner Fresnillo 2.5p higher at 700.5p.

Holiday firms and airlines were down sharply after the Tunisia tourist attacks, with First Choice and Thomson owner Tui the biggest blue-chip faller, down 79p or 7.1 per cent at 1,034p, while British Airways parent IAG declined 21.3p or 4.1 per cent to 493.2p.

In the FTSE 250, online grocer Ocado lifted 4.3p to 430p after reports that the firm is close to securing a deal with an international chain that will allow it to expand outside the UK. The retailer, which is due to deliver its half-year results tomorrow, has online tie-ups with supermarkets Waitrose and Morrisons, which dipped 1.6p to 182.6p.