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LONDON (Alliance News) - London shares ended lower Monday, though not as dramatically as might have been expected, following a resounding 'no' vote in Greece's referendum on Sunday.

Some of the expected market losses were scaled back before the market even opened Monday, when Greek Finance Minister Yanis Varoufakis unexpectedly resigned, citing the "loathing" for him by his eurozone negotiating partners. Euclides Tsakalotos was named Greece's new finance minister on Monday, according to Skai TV.

The FTSE 100 ended down 0.8% at 6,535.68, reaching a low of 6,506.71 points at the open. The FTSE 250 closed down 1.0% at 17,443.28, and the AIM All-Share finished down 0.7% at 758.51.

In Europe, the French CAC 40 closed down 2.0% and the German DAX 30 ended down 1.5%. Wall Street followed Europe lower but also steadily recovered its losses during its morning trading session. When the European equity markets closed, the Dow Jones Industrial Average and the S&P 500 and Nasdaq Composite indices all were down 0.3%.

"The Greeks have spoken and the markets have totally ignored them," said James Hughes, analyst at eToro. "It’s the market reaction that has been the thing that has taken everyone by surprise, or should we say lack of market reaction."

"The problem we now have is that we are back to the negotiating stage, and any kind of decision on an exit from the Eurozone or a new bailout deal could well be weeks away," Hughes wrote in a commentary. "However the fact that Greek banks are literally running out of money by the day means that we could well see some kind of interim deal."

Greek Prime Minister Alexis Tsipras promised, during a phone call to German Chancellor Angela Merkel, to present his government's latest proposals at an emergency eurozone summit on Tuesday, a Greek government official confirmed to dpa. Greece's stance in its upcoming round of negotiations with fellow eurozone members is supported by all Greek political parties save the Communist Party, said Defence Minister Panos Kammenos.

"The prime minister will go to Brussels to negotiate on behalf of all the Greek people," according to Kammenos in televised comments after a meeting among opposition leaders, Tsipras and Greek President Prokopis Pavlopoulos.

Meanwhile, the International Monetary Fund is "ready to assist Greece if requested to do so," IMF Managing Director Christine Lagarde said. The institution has "taken note" of the results of Sunday's referendum and is monitoring the situation, Lagarde said.

Ahead of the Euro summit, Merkel and French President Francois Hollande were set to hold talks in Paris on Monday, while European Commission President Jean-Claude Juncker were scheduled to hold a teleconference with the European Central Bank President Mario Draghi and Eurogroup President Jeroen Dijsselbloem.

The ECB will discuss whether to continue the emergency liquidity assistance to Greece banks. The assistance from the ECB is vital for Greek banks to stay liquid.

Three elements will be key to watch in the ECB's policy response to this political crisis, said Valentijn van Nieuwenhiujzen, an analyst at NN Investment Partners.

"The way the ELA is managed (to what extent will it remain open for Greek banks), the application of haircuts to the collateral that Greek banks need to post at the ECB, and new measures to tackle liquidity issues in other parts of European financial markets," the analyst said. "The balance between these three potential ECB measures will be crucial for the sentiment in financial markets and, thereby, the degree of damage to the European economy."

Among individual stock in London, Marks and Spencer was the biggest gainer in the FTSE 100 after Societe Generale said now is a good time to invest in M&S shares. The bank predicts a recovery in profits, yielding cash for shareholders, and says the current share price already factors in anticipated softness in M&S's General Merchandise sales.

The bank has a Buy recommendation, expecting M&S' like-for-like sales to be down 1.0% in the retailer's first quarter update due on Tuesday, compared to 0.7% increase in the fourth quarter. M&S shares ended up 1.6%.

Housebuilders also were in favour after Barclays reiterated its positive stance on them, saying it believes the sector has outstanding fundamentals. Bellway closed up 2.3%, Bovis Homes up 1.4%, and Redrow ended up 1.0%.

Barclays analyst Jon Bell said there is a largely "well-behaved and highly-attractive" land market in the UK, which is presenting a rich seam of opportunities, while competition levels are falling and hurdle rates are rising. However, Bell notes that the UK planning system remains costly, bureaucratic and slow, despite improvements.

Meanwhile, miners were amongst the worst performers in the FTSE 100 and FTSE 250 following a decline in metal prices. Carsten Menke, commodities research analyst at Julius Baer, said concerns about Chinese demand are pushing commodity prices lower, with aluminium, copper, iron ore and steel prices are all moving towards multi-year lows. China announced a string of measures over the weekend to reverse the recent free-fall in Chinese stock prices.

In the FTSE 100, Anglo American lost 1.9%, Antofagasta 1.9% and Glencore 1.4%. In the FTSE 250, Vedanta Resources ended down 6.9% and KAZ Minerals down 2.1%. The FTSE 350 mining sector index ended off 1.6%.

Roll-Royce Holdings was the biggest single decliner in the FTSE 100, down 8.2%, after issuing a profit warning. Rolls-Royce maintained its revenue guidance for 2015 but cut its underlying profit forecast as it said it is facing more challenges in its Civil Aerospace and Marine divisions and said it expects to take a significant hit in 2016 from the transition of its Trent 700 engine programme. The company said it will halt its GBP1 billion share buyback amid deteriorating free cash flow.

In the corporate calendar Tuesday, Cineworld Group and Connect Group issue interim management statements, ASOS issues a third-quarter trading statement and Robert Walters published a second-quarter trading statement. BACIT, Solid State and Sepura release full-year results, while McBride issues a trading update.

In the economic calendar, German and UK industrial production figures are due at 0700 BST and 0930 BST, respectively, while the UK manufacturing production is due at 0930 BST. The UK NIESR GDP estimate is due at 1500 BST. In the US, the trade balance is due at 1330 BST, and the Redbook index is due at 1355 BST.

By Daniel Ruiz; danielruiz@alliancenews.com

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