World stock markets tumble as new phase of Greece debt crisis begins

World stock markets have tumbled on Monday, June 29, 2015 after Greece failed to reach a deal with its foreign creditors over the weekend and imposed new strict measures to deal with their debt crisis.

Just before 01:00 UTC on June 29, Greek government closed all country's banks and capped daily ATM withdrawals at 60 Euros.

The move was preceded by the announcement of a July 5 referendum on austerity measures demanded by their creditors.

The government said all banks will remain closed until after the referendum and assured they will reopen them on Tuesday, July 7.

Prime Minister Alexis Tsipras ​appealed for calm, insisting that Greeks’ savings and pensions are safe.

European shares took a hammering in early deals on Monday, with Southern European banks especially badly hit, Reuters reported.

The Euro fell below $1.10 at one point, from around $1.1165 on Friday, the BBC said.

"In Japan, the Nikkei 225 share index closed down 2.88% at 20,109.95, while shares in China also fell. In a day of volatile trade, the Shanghai Composite was down 2.5% at 4,091.04 by mid-afternoon, having fallen by 7% at one point. In Hong Kong, the Hang Seng index was down 2.16% at 26,092.65. China's shares fell despite a surprise rate cut by the central bank on Saturday. In Australia, the benchmark S&P/ASX 200 closed down 2.23% at 5,422.50, while in South Korea, the benchmark Kospi ended 1.4% lower at 2,060.49 – its biggest daily percentage fall since late May."

Imposing limits on the flow of capital has become an increasingly common stop-gap measure for governments in turmoil, Bloomberg explained.

"Countries including Thailand, Malaysia and Indonesia imposed limits on outflows during the Asian financial crisis that began in 1997 as worries over developing-world finances caused investors to pull money out of emerging markets.

More recently, Iceland implemented capital controls in 2008. The krona stabilized shortly after and the IMF said the measures gave the nation the breathing room it needed the to get back on track. This month, Iceland unveiled plans to lift those restrictions."