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Greek banking stocks plunge again

Greece’s banking stocks have plunged for the second day in a row, almost reaching the 30 percent daily limit for losses only minutes after trading began. That limit was reached Monday, compounding Athens’ financial woes.
The Athens stock exchange’s banking index, which measures the value of Greece’s four largest lenders, dropped 29.2 percent on Tuesday shortly after the markets opened.

The plunge dragged down Athens’ main index, the Athens General Index, by more than 4 percent within 10 minutes of it opening up 0.11 percent, a day after Greek stocks suffered record losses when the bourse opened following a five-week closure.

Forty minutes into Tuesday’s trading session, the index was down 3.64 percent at 643.72 points.

Record losses

On Monday, Greek stocks fell 16.2 percent, the biggest loss on record. The fallout, however, seemed contained to Greece and did not spread to other eurozone nations.

On Tuesday, the ratings agency Standard & Poor’s tempered its outlook for the eurozone on the whole from “stable” to “negative,” expressing concern over Greece’s struggle to service its massive debt load and the risks it poses for other members of the common currency area.

The weeks-long trading suspension in Athens was not without precedent, thus analysts were not surprised by the sharp loss of value after the markets reopened.

The Greek government imposed the closure in order to stem the flow of capital leaving Greece while politicians hammered out a bailout deal with the country’s international creditors.

cjc/hg (Reuters, AFP)

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