The defiance of the Greek people against austere fiscal measures recommended by the country’s creditors has sent a chill through global equity markets, including the ASX.

But stockbrokers say that investor confidence is also being undermined by instability on China’s leading stock exchanges, which have lost almost 30 per cent since early June.

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Australia’s stockmarket looks set for a dramatic day of trading after opening on Monday down 1.6 per cent, with mining and utility stocks absorbing the biggest hits.

The benchmark ASX/S&P 200 index was trading at 10.17am AEDT down 87.5 points to 5458.8 points.

Origin Energy (down 4 per cent), Fortescue Metals (down 3.8 per cent) and AMP (down 2.7 per cent) have posted the biggest losses among local blue chip.

Chinese market in turmoil

Markets throughout Asia are also tanking on deepening concerns about valuations of Chinese companies.

The Shanghai exchange – the world’s third largest stockmarket – has fallen more than 25 per cent since early June as investors have grown nervous about the growth prospects of China’s slowing economy.

The Chinese Government has imposed strict controls on trading activities this week, including a freeze on new stockmarket listings and the introduction of emergency liquidity support for margin lenders hard hit by the dramatic falls on the Shanghai exchange.

Instability in Chinese equity markets is shaping as a bigger threat to global financial markets than the Greek debt crisis.

In the past month $3 trillion has been wiped from the value of Chinese shares.