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Greek stock market shows signs of recovery after three day crash

George Georgiopoulos

Published 06/08/2015 | 10:03

An employee looks on at electronic board displaying stock prices at the entrance of the Athens Stock Exchange, Greece, August 3, 2015. Greece's stock market plunged nearly 23 percent on Monday when it opened after a five-week shutdown brought on by fears the country was about to be dumped from the euro zone. REUTERS/Yiannis Kourtoglou
An employee looks on at electronic board displaying stock prices at the entrance of the Athens Stock Exchange, Greece, August 3, 2015. Greece's stock market plunged nearly 23 percent on Monday when it opened after a five-week shutdown brought on by fears the country was about to be dumped from the euro zone. REUTERS/Yiannis Kourtoglou

Greece's stock market rebounded today after three days of losses and some bank stocks put in gains after the sector crashed more than 63 percent over the week.

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The battered banking index, however, continued to chalk up overall losses, dragged lower by two of its constituent lenders which remained under selling pressure.

The banking index was down 3.6pc, with shares of Alpha Bank falling 26.8pc and Piraeus Bank shedding 16.7pc.

But peers Eurobank and National Bank rebounded as their steep plunge this week attracted buyers, gaining 7.7pc and 9.5pc respectively.

The broader market -- of which around 20pc constitutes banking stocks - trimmed early gains and was up just 0.2pc.

"The key determinant for bank values remains the outcome of the coming comprehensive assessment by regulators," said analyst Nick Koskoletos at Athens-based Eurobank Equities. "Trading is expected to remain highly volatile in the interim."

Greek banks need to be recapitalized after a flight of euros from deposits for most of this year and mounting bad loans. But that will hurt existing shareholders, when it comes, by diluting the value of their holdings.

Athens and its international lenders share the view that banks must complete their recapitalization by the end of this year and avoid a haircut on large depositors, Greece's finance minister said yesterday.

The European Union estimates that the recapitalization may cost between €10bn and €25bn.

The Athens bourse's large-cap share index rose 0.86pc, with 20 of its 25 constituent stocks scoring gains.

Reuters

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