Greek Stocks Plunge Most in Decades as Market Reopens to Crisis

Greece’s stock market reopened after five weeks to the most savage wave of selling in decades, underlining a crisis that’s crippled the economy and pushed the country’s euro membership to the brink.

   Banks led the plunge following the shutdown, which was due to capital controls to prevent the lenders from bleeding more deposits. Piraeus Bank SA and National Bank of Greece SA sank 30 percent, the daily maximum allowed by the Athens Stock Exchange. The benchmark ASE Index dropped 16 percent on Monday after sliding as much as 23 percent.

   “The situation in Greek equity markets will have to get a lot worse before it gets better,” said Luca Paolini, Pictet Asset Management’s chief strategist in London. “There are still critical risks to be resolved.”

   The selloff shows the scale of the crisis still facing Prime Minister Alexis Tsipras as he negotiates a third bailout with creditors after six months that have put unprecedented strain on the Greek economy and its financial system.

   The Greek market came to a halt in June as Tsipras ended talks with the euro region to ask voters to decide in a referendum whether to accept the terms offered in exchange for emergency loans. The move snuffed out a short recovery in stocks, which have now lost more than 85 percent of their collective value since 2007. The ASE slump on Monday was the biggest since at least 1987.

Πηγή: bloomberg.com