TORONTO -- North American markets are lower in the wake of Sunday's strong No vote in the Greek debt referendum and a big drop in oil prices.

At mid-afternoon, the S&P/TSX composite index was down 85.06 points at 14,597.33, with the gold sector one of the few bright spots as the August contract on the New York Mercantile Exchange shot up $8.40 to US$1,171.90 an ounce.

Gold is considered a relative safe haven in times of economic turmoil and fears over possible fallout from the Greek debt crisis have prompted investors to move into less riskier assets.

In New York, markets also declined in response to developments in Greece, with the Dow Jones industrial average down 82.92 points at 17,647.19, while the Nasdaq lost 33.56 points to 4,975.65 and the S&P 500 fell 12.86 points to 2,063.92.

The price of oil was also a worry, with the August contract plunging $3.81 to US$53.12 a barrel, a level it hasn't seen since mid-April.

Besides Greek worries, lower oil also put strain on the Canadian dollar, which was down for a fifth consecutive trading day, losing 0.56 of a U.S. cent to 79.06 cents.

The loonie has been under renewed pressure since speculation began heating up last week over a possible Bank of Canada interest rate cut amid fears that the country is in a recession -- defined as two consecutive quarters of negative economic growth.

Meanwhile, the decline on North American markets followed even bigger drops in Europe after more than 60 per cent of Greeks voted No in Sunday's referendum on austerity measures that had been demanded by creditors in return for bailout loans.

In Europe, Germany's DAX fell 1.5 per cent, the CAC-40 in France was down two per cent and the FTSE 100 index of leading British shares was 0.8 per cent lower.

Talks between creditor countries and Greece are scheduled to resume Tuesday, but many fear that the big margin of rejection by Greek voters moves the country a step closer to leaving the euro and possibly the European Union.

Opinion is divided on how serious a so-called "Grexit" from the euro would be, but markets have generally reacted strongly to negative developments throughout the crisis.

In economic news, the Bank of Canada reported a slight overall improvement in optimism among Canadian business in its summer outlook survey.

But as in other recent surveys, pessimism in oil-producing provinces was a counterweight to the improved outlook in non-oil producing regions, including the manufacturing centres of Central Canada.