ECONOMY

Delayed shock for ASE

The Athens Stock Exchange (ASE) yesterday suffered the fallout from the terrorist attacks on New York and Washington DC on Tuesday as a wave of panic selling dominated the session. The result was a 7.74 percent fall in the general share index to 2,358.05 points, the biggest drop this year. But Athens’s dismal performance mirrored the declines in the major Asian markets. The Nikkei-225 index posted its largest one-day drop in more than 17 years, the Seoul composite index fell to a three-year low and the Hang Seng dipped below the psychological 10,000-point mark for the first time in two and a half years. By contrast, European markets recovered from their sharp declines on Tuesday, posting small gains in late trading. Europe’s bourses had gone into an immediate tailspin on Tuesday as news of the attacks in the US took place in the middle of trading. Germany’s DAX Index shed more than nine percent, the London Stock Exchange lost nearly 4 percent and the Paris CAC-40 fell by over 7 percent. Following the lead set by the major European bourses, Athens stock exchange authorities decided to allow trading yesterday, with the market opening and closing two hours later than the normal time. They also split the 18-percent share fluctuation limit, setting a 6-percent ceiling in the initial stage. Shares reaching the new limit were suspended for 15 minutes and were then allowed to resume trading subject to a 12-percent fluctuation limit. ASE head Panayiotis Alexakis called on investors to keep calm and not make hasty decisions. Such reassurances, however, did little to boost investor confidence, which was further dented by two hoax calls of bombs placed in the administrative building at Sophocleous Street. The local market yesterday duplicated the performance of the major European markets on Tuesday, said Nikos Galousis, research head at Kapa Securities. P & A Voilis analyst Alexandros Manoloudis said the outcome was to be expected in view of the continuing turmoil on world markets. Today was characterized by panic selling, especially among retail investors, he said. This in turn boosted turnover to 259.29 million euros (88.35 billion drachmas), nearly double Tuesday’s figure. All the sectors posted sharp declines, with the exception of insurance, which fell by just 3.11 percent. The FTSE/ASE-20 shed 7.71 percent to 1,325.13 points and the FTSE/ASE-40 lost 8.95 percent. The small-cap 80 fell by 9.77 percent. Lingerie company Sex Form and information technology company Quality and Reliability escaped the fallout, with their shares the only ones to show gains. The analysts said it was to early to predict how the market will do today. With such sudden, large losses, it is possible we could see a recovery tomorrow [today]. This, however, could be offset if signs point to a global recession and if foreign markets continue to see volatility, said Galousis. Bourse authorities said yesterday that the market will revert to its normal trading hours and fluctuation limit today.