Greek stock markets plunge after five weeks of closure

Greece’s fragile economy begins returning to normality with Greek stock markets reopening after 5 week shutdown, though restrictions continue to apply

Photo by: Reuters
Photo by: Reuters

A sharp fall in the Athens stock markets greeted investors on Monday after it reopened for trade for the first time since late June.

The closure of the stock markets came alongside capital controls to protect Greek banks from crashing as the future of the country in the eurozone seemed in doubt.

With Greek Prime Minister Alexis Tsipras bowing to the implementation of new tight austerity measures, which have be harshly criticised by many members of his governing party, negotiation talks with Greece’s international lenders over a €86 billion ($94 billion) third bailout have re-opened. 

This, however, was not enough to restore investor confidence as fears of further fruitless bailout talks and political tensions continue to haunt the country’s economy. 

Bank stocks, which make up close to 20 percent of the main Athens share index, were hit hard after an extensive bank holiday and capital controls. The Athens Stock Exchange (ASE) index slumped to 615.72 points within a few minutes of opening, losing more than 22.82 percent of its value from when it closed in June. 

Since Greek banks were forced to close, US listed stocks in the National Bank of Greece also lost around 30 percent of their value. 

According to an article published in the Avgi newspaper on Sunday, the Greek government is seeking an initial capital of 10 billion to recapitalise its banks. 

Despite the opening of stock markets capital controls will continue in order to keep euros within the country. Additionally, at the request of the Greek government and the European Central Bank (ECB), Greek investors will not be permitted to withdraw additional money from deposit accounts to purchase shares.

TRTWorld and agencies