With the Greek economy continuing to be unstable, the reopening of the stock market there did not produce a good day for Greek companies on Monday. The market plummeted upon opening and it was no more than minutes before Greek companies were losing in the billions of dollars in market value. The market, after five weeks of being closed, very quickly dropped 22 percent, but rallied somewhat later in the day.
It closed down 16.2 percent, though some bank shares lost nearly 30 percent.
Financial analyst spoke of panic rippling through the exchange. Evangelos Sioutis, the manager of equities at Guardian Trust, told Canada’s CBC News that there was a “wave of panic” upon opening as traders did not know how the long-dormant market would react. “There are no buyers,” Sioutis said. Closer to the end of the trading day he said the outlook for future days was “not clear.”
Meanwhile, a survey revealed that the bank closures and economic uncertainty, and the apparent lack of faith in the bailout deal Prime Minister Alexis Tsipras brought back from his negotiations with the European Union, continue to negatively impact Greece’s economy. An example is in the manufacturing sector, with surveys showing it is going through its worst period on record; manufacturing output was down 30.2 percent during the month of July.
“Manufacturing output collapsed in July as the debt crisis came to a head,” economist Phil Smith of the financial information company Markit said. “Factories faced a record drop in new orders and were often unable to acquire the inputs they needed, particularly from abroad, as bank closures and capital restrictions badly hampered normal business activity.”
While Tsipras got parliament to pass the bailout deal he reached in Brussels, he is facing strong dissent from his own left-wing Syriza party and may be forced to call an early election sometime in the fall, analysts say.