ECONOMY

Athens bourse tumbles 10 percent

The Athens Exchange (ATHEX) plummeted nearly 10 percent yesterday, as world markets fell sharply on growing alarm that a global recession will ravage corporate profits and push smaller developing economies to the brink of collapse. Late-session buying helped trim losses after the general index, which closed off 9.71 percent at 1,728.49 points, had shed as much as 15 percent mid-session. The Athens bourse gave up 18 percent for the week. European bourses, which managed to trim losses late in the day, were in a tailspin, with Germany’s DAX and France’s CAC losing more than 10 percent during the day, before closing down 4.9 percent and 3.5 percent respectively. Greek banks were among the heaviest casualties, giving up 9.76 percent yesterday. Index heavyweight National Bank slumped 16.10 percent to 11.88 euros after falling 20 percent earlier in the day. Eurobank, Greece’s second-largest lender, fell 9.56 percent to 7 euros. Senior bank sources have attributed the selling pressure to panic conditions on the market and broader risk aversion by institutional investors. Market experts also said that exposure to emerging markets right now is seen as a weakness due to growing evidence of a global recession. «We are moving to a stage where emerging market exposure is very bad. If you look at where defaults on sovereign debt is going to be, it is going to be in the emerging markets somewhere,» said Jim Wood-Smith, head of research at Williams de Broe, according to Reuters. In recent years, Greek banks have been increasing their exposure in emerging markets such as Bulgaria and Turkey to offset a slowdown in lending growth in the domestic market. Greece’s economic growth, which has been one of the eurozone’s outperformers in recent years, is also heavily dependent on neighboring emerging markets. Turnover reached 333.3 million euros versus 352 million in the previous session.