Greek Stocks Drop Sharply As Market Reopens For First Time Since June

Five weeks after an economic crisis forced its closure, Greece's stock market reopened Monday to a flurry of selling and falling prices. Banks led the losses on the Athens Stock Exchange, which is also coping with poor manufacturing data.

When it opened, the Athens Stock Exchange General Index plummeted from 797.52 to a new 52-week low of 615 — a drop of nearly 23 percent. But the index then recovered some ground, rising to 660 (a 17 percent drop) some three hours after trading began. It closed down 16.2 percent.

From Athens, NPR's Joanna Kakissis reports:

"The stock exchange closed on June 29 — the same day as the country's banks. The government was forced to close both after an international bailout loan program ended, leaving Greece on the verge of a eurozone exit.

"The government agreed to a third bailout loan program on July 13 with the eurozone and International Monetary Fund. But it comes with more unpopular tax hikes, spending cuts and economic restructuring.

"Since then, banks have reopened, though limits on cash withdrawals and transfers remain. The stock exchange also reopened with restrictions — but analysts still expect Greek shares to plunge by at least 20 percent Monday."

The shares of Greece's largest banks, such as Piraeus Bank SA, Eurobank Ergasias SA and National Bank of Greece SA, led the losses, dropping by some 30 percent after trading began.

As the BBC reports, trading resumed as new data was released showing that "Greek manufacturing activity plunged in July to its lowest level on record as a three-week bank shutdown caused new orders to dive and created serious supply problems."

In Athens, many traders expect the swoon to last for several days before the market settles down, according to Bloomberg News

"It's a total disaster, it's like hell here," Stavros Kallinos, the chief asset manager at Guardian Trust, tells Bloomberg. "You can't have a market working properly with capital controls. It will be a gradual process. We're moving forward, but a step at a time."