Debt paper yield takes stocks lower
The local bourse remains susceptible to the influence of the spread between the Greek 10-year bond’s interest rate and that of the German 10-year Bund, which soared over the course of last week. The Athens Exchange (ATHEX) general index closed the week on Friday at 1,991.22 points, recording a 4.95 percent drop from the previous week’s close at 2,095.02 points. Banks suffered particularly mid-week, as worries about their funding increased, while the market had not yet reacted to the new downgrade by Fitch of Greece’s credit rating on Friday. Over the last six months, the Greek stock market has lost some 35 billion euros of its capitalization, with the general index declining by about 35 percent in the same period. Analysts are saying that investors do not seem inclined to offer the bourse any more time to boost credit, as they do not seem to believe in the European Union support framework or the capabilities of the Greek government, as a greater recession appears to be looming.
