Greek stock market stumbles toward stabilization

Greece has slowly edged its way back from the Grexit precipice as its stock exchange reopens after a 35-day closure [Xinhua]

The Greek economy is in recession and the overall health of local markets may be less than desirable but if the stock exchange (ATG) is any indication, investors are feeling that a semblance of normalcy is slowly returning.

When it opened after a five-week closure on Monday, it plummeted by 23 per cent.

Not surprisingly, banking shares dropped by 30 per cent before automatic loss limits kicked in and prevented further trade.

Shares of the Central Bank of Greece, however, were up more than 8.5 per cent on Monday.

But the ATG recouped some losses and closed at at an overall 16 per cent loss. When it opened on Tuesday, banking shares – which account for about 20 per cent of the stock exchange – took another hit. Other blue chip stocks performed much better and gained traction.

Central Bank of Greece shares went up 15 per cent on Tuesday.

The ATG closed 1.2 per cent down to 659.94.

The return of the stock exchange comes a week after European Union creditors began negotiations to finalize the terms of the bailout package agreed with Athens.

Last month, Greece and its creditors agreed to a three-year $95-billion bailout regimen.

Athens’ negotiations to finalize the deal must come before August 20, when Greece is expected to repay a $3.8-billion loan to the European Central Bank (ECB).

But both parties appear to be optimistic.

On Tuesday, Greek Finance Minister Euclid Tsakalotos told reporters following his meeting with ECB and EU representatives that the talks would be quickly concluded.

“We are moving in the right direction and intense work is continuing,” Commission spokeswoman Mina Andreeva told Reuters.

The BRICS Post with inputs from Agencies