Greek stock index drops on first day of market reopening

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 Morningstar.co.uk, 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

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.