Greek stock index drops on first day of market reopening

<p>The Athex ended down by 16.23 per cent.</p>

After a five-week closure, the Athex re-opened today. The main Athens stock index, it ended the day down by 16.23 per cent.

The biggest fallers were Greek's four top lenders. Piraeus Bank, National Bank, Alpha Bank, and Eurobank were all down by 30 per cent, which is the maximum allowed. Banks make up about 20 per cent of the index.

Only a few minutes into opening for trade, the bourse had fallen behind by 22.87 per cent, or 182.36 points, bringing it to 615.16 points. It recovered slightly during morning trading, but was still more than 18 per cent down by midday.

Commenting on the drop, Holly Cook, editor of financial website, told the BBC that it was not surprising. She said that there was a lot of negativity building up and that Greece's economic recovery could take a while.

"We need to see what's going to come in the weeks and months ahead," she added.


Manufacturing accounts for about 10 per cent of the Greek economy. Data released on Monday (August 3rd) indicated that Greek manufacturing activity dropped to its lowest level on record during July. The three-week shutdown of the banks led to new orders during the period to fall, and there were also major problems with supplies.

According to Markit's purchasing managers' index (PMI), manufacturing fell to 31.2 points. This was the lowest reading since records began in 1999.

Head of the Greek capital markets commission Constantine Botopoulos told Skai Radio that the day's trading results were to be expected. "Markets will not fail to comment on such an extensive shutdown," he explained.

He also advised a calm approach. "We must not get carried away. We must wait until the end of the week to see how the reopening will begin to be dealt with more coolly," he said.

The European Commission expects Greece to go back into recession this year, reports the BBC. The country's economy is predicted to contract by between two per cent and four per cent.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.