Greek markets open 22.8% down after five-week closure
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Greece's stock market fell sharply on Monday after being closed for five weeks under capital controls imposed by the government in Athens to stop a flight of euros from the country.
The main index was down nearly 23 percent in early trading and the National Bank of Greece, the country's largest commercial bank, was down 30 percent.
The ATHEX plunged to 615.72 points a few minutes after opening at 0730 GMT, down 22.82 percent from its June 26 close.
"Most of the selling pressure is seen in bank shares, where there is about 100 million euros worth of unexecuted selling orders," said investment adviser Theodore Mouratidis.
"There may be some more slide in store for (Tuesday) unless buyers emerge later in the session," he said.
However, Constantine Botopoulos, head of the capital markets commission, who formally approved the reopening of the exchange, told Skai radio, "We must not get carried away. We must wait until the end of the week to see how the reopening will begin to be dealt with more coolly."
The exchange and Greek banks were closed on June 29, when controls on money withdrawals and transfers were imposed to prevent a collapse in the banking system due to a run on deposits.
The newly reopened Greek stock exchange is operating as normal for foreign investors, but local traders face limits on their transactions as part of the capital controls imposed by the government last month.
The restrictions mean that Greek investors are unable to finance the purchase of securities by taking money from their bank accounts in Greece. They will, however, be able to use foreign bank accounts or make cash transactions.
The volatility cap has been reduced from 30 percent to 20 percent for the first three days of trading.
The country's lenders are in a vulnerable position because of the outflows of billions of euros from deposits over the past six months.
Some 40 billion euros ($44 billion) has been withdrawn from Greek banks since December, according to the country's banks association, amid fears over the fate of the Greek economy.
The reopening of the stock market comes after senior EU and IMF auditors held their first meetings with Greek ministers to finalise a new three-year bailout for the country which could be worth up to 86 billion euros ($94 billion).
Traders were expecting losses for a number of reasons that will all weigh on the bourse. There is concern, for example, that negotiations on a new bailout will again become bogged down, leaving the government and banks perilously short of cash.
A report on Sunday in Avgi newspaper, which has ties to Syriza, said the government was seeking €24 billion in a first tranche of bailout aid from international lenders in August.
Of this, the newspaper said, €10 billion was earmarked for an initial recapitalisation of Greek banks, €7.16 billion was slated to repay an emergency bridge loan and €3.2 billion will be used to repay Greek bonds held by the European Central Bank and others.
The European Commission, however, believes an agreement in August is unlikely and that a new bridge loan will be needed.
The European Commission also says the Greek economy will contract 2 to 4 percent this year, a return to the recession that plagued the country for six years until 2014.
(FRANCE 24 with AFP, AP and REUTERS)