With clouds gathering over the eurozone due to signs of recession in Germany, Italy and France, the Greek stock and bond markets took a dive over the last couple of days, burdened by the country’s increased political risk. on Wednesday the local bourse gave up 6.25 percent, following a 5.70 percent drop on Tuesday, while bond yields soared to levels unseen since May 2012.
The prolonged pre-election climate created by the uncertainty raging around the election of a new president and international investors’ concern that Greece’s possible exit from the bailout procedure will lead to delays to reforms and privatizations have resulted in a toxic environment which has been hurting local markets since early October.
Just under 6.9 billion euros was wiped from the Greek bourse’s capitalization on Tuesday and Wednesday, with the majority of stocks dropping to new year-lows.
“The picture that our customers abroad paint is of an unknown territory for Greece’s economy should there be a snap poll,” a mutual fund manager told Kathimerini.
Ten-year borrowing costs shot up by more than 80 basis points to 7.85 percent, their highest since February, because “investors are worried Greece cannot survive alone… At this level the market is closed for Greece,” ING senior rate strategist Alessandro Giansanti told Reuters.
The Athens Exchange (ATHEX) general index ended at 888.93 points on Wednesday, shedding 6.25 percent from Tuesday’s closing of 948.21 points, after dropping nearly 10 percent at mid-session. The large-cap FTSE/ATHEX 25 index contracted 6.32 percent, ending at 289.61 points.
Among blue chips the biggest losses were for GEK Terna (down 16.04 percent) Terna Energy (14.55 percent), EYDAP (14.04 percent) and Viohalco (10.46 percent). Coca-Cola HBC outperformed, giving up just 1.90 percent.
In total 20 stocks showed gains, 113 declined and 12 remained unchanged.
Turnover reached 256.3 million euros, against Tuesday’s 161.8 million.