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By Bloomberg

European stocks declined for a second day while Spanish and Italian bonds rose as investors braced for Greece’s referendum on terms of a bailout. Chinese shares capped their biggest three-week slide since 1992.

The Stoxx Europe 600 Index decreased 0.3 percent at 8:28 a.m. in New York. Spain’s 10-year yield dropped four basis points to 2.27 percent and Italy’s rate slipped to 2.30 percent. The euro pared this week’s retreat. Humana Inc. jumped in German trading as Aetna Inc. agreed to buy the company. The Shanghai Composite Index fell 5.8 percent, taking its loss from a June 12 peak to 29 percent. Oil was set for its worst week since March. U.S. markets were shut for a public holiday.

Stocks extended declines in a week where more than $1.5 trillion was erased from the value of global equities after Prime Minister Alexis Tsipras short-circuited bailout talks by calling a referendum. While Tsipras has vowed to sign off on creditor demands should people vote “yes” in Sunday’s plebiscite, the outcome is too close to call, according to a Bloomberg poll on July 2.

“Sunday’s vote is pretty important for everyone right now,” said Dirk Thiels, head of investments at KBC Asset Management in Brussels. “Until then we’ll be in a cautious mode, and we won’t change that until we have some idea of where this Greek story is going. We’ve gone underweight equity and reduced our periphery exposure in bonds.”

A poll commissioned by Bloomberg News showed 43 percent intend to vote “no” to reject the austerity demanded by creditors in exchange for financial aid; 42.5 percent back a “yes” to accept the conditions, the survey of 1,042 people by the University of Macedonia Research Institute of Applied Social and Economic Studies showed.

Low Volumes

More than two shares declined for every one that advanced in the Stoxx 600, with trading volumes 36 percent lower than the 30-day average, according to data compiled by Bloomberg. The gauge, which tumbled 2.7 percent on Monday after Tsipras’s surprise announcement, has dropped 3.3 percent this week. A measure of European stock volatility headed for a three-year.

The Global X FTSE Greece 20 ETF traded a record 15.9 million shares over four days in the U.S., plunging 19 percent on Monday and regaining about half of the losses from Tuesday through Thursday. Markets in Greece have been closed this week.

Spanish bonds trimmed this week’s losses, after its 10-year yield climbed as much as much as 49 basis points to a 10-month high of 2.60 percent on Monday. The rate on Italian notes reached 2.72 percent the same day.

The euro strengthened 0.1 percent to $1.1097, paring this week’s drop to 0.6 percent.

Aussie Tumbles

The Australian dollar slumped 1.4 percent to 75.26 U.S. cents, after reaching 75.11 cents, the lowest since May 2009, amid sliding iron ore prices.

Shares of commodity producers fell the most among industry groups on Friday as iron ore was set for the biggest weekly loss since April amid a surge in shipments and data showing the slowdown in China’s steel industry deepened.

Royal Bank of Scotland Group Plc retreated 1.9 percent as U.S. regulators have told the lenders that it could pay as much as $13 billion if it loses a lawsuit over its handling of mortgage securities.

K+S AG added 5.1 percent after Canadian fertilizer producer Potash Corp. of Saskatchewan Inc. said it can address the German company’s concerns about its takeover proposal.

Humana jumped 19 percent in German trading. Aetna agree to buy the second-largest provider of private Medicare insurance for $37 billion in cash and stock to broaden its health-care coverage.

The Standard & Poor’s 500 Index ended the shortened week lower by 1.2 percent. That was its first weekly swing, up or down, of more than 1 percent since April.

A Labor Department report showed on Thursday that U.S. employers added 223,000 jobs in June, less than economists had projected, while wages stagnated. The jobless rate fell to a seven-year low as people left the workforce.

China Rout

The MSCI Emerging Markets Index slid 0.6 percent, extending this week’s drop to 1.5 percent.

Chinese equities erased more than $2.8 trillion of value in three weeks as measures to shore up shares failed to stop margin traders from unwinding positions at a record pace.

The heads of at least 28 companies listed on the ChiNext pledged to support prices through buying equities or halting new share sales. The ChiNext gauge of mostly technology companies surged 4 percent after plunging 33 percent from its June 3 peak through Thursday.

The China Securities & Regulatory Commission is examining recent short-selling activity for stock-index futures amid the slump, people with knowledge of the matter said.

Hong Kong’s Hang Seng China Enterprises Index lost 1.4 percent and is down 15 percent from its May 26 peak.

Oil Falls

Russia’s ruble slipped 0.5 percent, extending declines to 1.8 percent over five days. A Bloomberg gauge of 20 currencies fell for a second week, sliding 0.5 percent.

West Texas Intermediate oil lost 0.7 percent to $56.55 a barrel in electronic trading, after erasing gains on Thursday.

U.S. crude is down 5.3 percent this week after an industry report showed that the number of U.S. oil rigs in use advanced for the first time this year. Floor trading in WTI will be closed for the U.S. holiday, with Friday’s transactions booked with Monday for settlement purposes.

Iron ore futures sank 2.2 percent to 408 yuan ($66) a metric ton on the Dalian Commodity Exchange, the lowest close since April 23. The benchmark lost 6.6 percent this week, the biggest drop since the period to April 3.

Australian exports of the steelmaking material rose to a record in June.

Nickel fell 0.9 percent, headed for a fourth weekly decline, the longest run of losses since April. Prices dropped to a six-year low this week as China’s biggest metals bourse moved to ease delivery constraints.