BUSINESS

Turkey tumult hits stocks, bonds

ELEFTHERIA KOURTALI

TAGS: Economy

The deepening economic crisis in Turkey and continuing concerns over Italy’s euroskeptic government took a toll on Greek stocks and bonds on Monday, demonstrating once again how vulnerable the country is to external factors just days before it emerges from its international bailouts.

The general index of the Athens Stock Exchange was down 3.10 percent to 720.71 points, with banks the worst affected by the negative sentiment as their sectoral index slumped 6.6 percent to 745.33 points.

Meanwhile the yield on Greek 10-year bonds increased to 4.29 percent, up 1.63 percent from Friday.

The fact that Greek banks took a hit even though they are not exposed to Turkey suggests investors are fleeing emerging markets such as Greece due to fear of contagion.

As a result potential investors continue to steer clear of Greece despite repeated assurances by Greek and European officials that the country is on the path to recovery.

A decision on Friday by Fitch Ratings to upgrade Greece’s long-term foreign currency rating to BB- from B, was essentially ignored by investors, who appear concerned about the country’s prospects within an unstable international environment.

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