The Greek stock market plunged on Monday morning as trading resumed after a five-week Athens Stock Exchange closure.
The Athex Composite crashed from 800 to 620 points, a 22% drop, at the market open. According to Marketwatch this was the index’s worst ever single drop and it occured within minutes after trading resumed.
Banks First, More Restrictions
Banking shares were heavily sold with the National Bank of Greece down to its 30% daily volatility limit. The Greek banking index was also sold down to the volatility limit within minutes. Blue chip futures (expiring August) were down 20.5% today.
Investment adviser Theodore Mouratidis told Yahoo Business News:
Most of the selling pressure is seen in bank shares, where there is about 100 million euros worth of unexecuted selling orders.
The Athens Stock Exchange was closed in late June as part of capital controls intended to halt euro outflows from Greece. Most restrictions remain, for example, Greeks cannot fund trading accounts, since government and the ECB fear that stocks may be used as a means of expatriating euros from the country.
A Greek regulatory source told Yahoo Business News that the Greek government seeks to extend a ban on stock selling when it expires later today (Monday).
Manufacture Collapses, Deepening Recession
The European Commission anticipates that the Greek economy will shrink between 2-4% in 2015 and officially return to recession.
A manufacturing survey, today, shows that Greek manufacturing activity has plunged to record lows as new orders ceased while the three-week bank shutdown resulted in supply chains either being delayed or closed.
Readers can get an independent market perspective in today’s CCN.LA Global Economic Outlook.
Chart from Investing.com, image from Shutterstock