Asian stocks and the euro stumbled on Monday after a Greek vote against austerity measures endangered its future in the single currency and raised the risk of a full-blown crisis in the euro zone.
U.S. equity futures dropped around 1.2 percent ESc1 though they were off early lows. Japan's Nikkei .N225 share index fell 1.4 percent while MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.5 percent.
Bucking the global trend was China's stock market as a salvo of rapid-fire support measures from Beijing over the weekend prompted a much-needed rally.
The CSI300 index .CSI300 of the largest listed companies in Shanghai and Shenzhen jumped 4.2 percent in early trade, while the Shanghai Composite Index .SSEC soared 5 percent.
The gains only recouped some of the recent steep losses and it was far from clear if panicky investors who borrowed heavily to speculate on stocks would refrain from selling.
While the early price action was choppy across Asia, dealers emphasized that markets were orderly with no signs of financial strain and many assuming the European Central Bank would step in with a pledge of extra liquidity at some point.
The Japanese government said it was ready to respond as needed in markets and was in close touch with other nations.
"A lot depends now on what the ECB does with liquidity support for the Greek banks," said Antonin Jullier, head of equity trading strategy at Citi. "The ECB has the capacity to limit the spread of contagion."
The euro was down 0.5 percent at $1.1055 EUR= but well above an early low of $1.0967. It had initially dropped around 1.5 percent on the safe-haven yen only to find a big buy order waiting, which vaulted it back to 135.48 yen EURJPY=.
Likewise, the dollar recouped its early drop on the yen to be all but steady at 122.57 JPY=. The dollar index added 0.2 percent to 96.279 .DXY.
Demand for highly rated sovereign debt saw the U.S. 10-year Treasury yield fall 10 basis points to 2.29 percent US10YT=RR.
Fed funds futures <0#FF:> also rallied as investors wagered the endless uncertainty in Europe would make the Federal Reserve more wary of raising U.S. interest rates, or at least to tighten more gradually once it began.
In commodities, gold got a lift to 1,1680.30 UD dollars an ounce but Brent crude lost 52 cents to 59.80 US dollars a barrel LCOc1.
The latest reports from Greece said around 61 percent of those voting in the referendum had backed the government and rejected the bailout conditions. [TOP/CEN]
Following the outcome, calls mounted in Berlin to cut Athens loose from the currency union, raising the risk of a full-blown crisis in the euro zone.
German Chancellor Angela Merkel and French President Francois Hollande will meet in Paris on Monday afternoon as the European Union's grand single currency project faces the biggest challenge since its inception.
Stunned European leaders called a summit for Tuesday to discuss their next move as investors fear "Grexit" could encourage anti-euro sentiment in other countries.
The ECB, which holds a conference call on Monday morning, is likely to maintain emergency funding for Greek banks at its current restricted level, sources said.
Though Greek government officials have vociferously denied any plans to issue a parallel currency, some investors suspect Athens could have no choice in the matter.