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 There were signs, however, that the rout that took 8 billion euros
off the market on Monday may be ending as already historically low
valuations fall to levels at which investors start moving back in.
The banking index, comprising the four major lenders, was down 27.1
percent, managing to keep above the 30 percent daily loss limit at
which trading is halted. It hit that limit on Monday.
This was partly because there were some buyers on Tuesday for
National Bank of Greece and the smaller Attica Bank, both down 22
percent.
The overall Athens General Index, which shed a record 16.2 percent
on Monday, was down a far more modest 1.4 percent on Tuesday. That
suggested that without the banks, which hold a weighting of around
20 percent, the index would have risen on the day.
"Non-financial stocks were pressured a lot and we are seeing a
rebound. They will likely balance out at a new level in the next few
days, meaning volatility will ease," said analyst George Doukas at
Piraeus Securities.
Among gainers were gaming group OPAP, up 4.6 percent, and Aegean
Airlines, 8.8 percent. Some other tourism-related companies also did
well.
There was no spillover evident from Greece to other European
markets. Many investors have cut their exposure to Greece and are
focusing more on the state of core markets such as Germany and
France.
FEAR FOR THE FUTURE
Greek shares resumed trading on Monday after a five-week suspension
as part of capital controls imposed to stem a debilitating outflow
of euros that threatened to cause a banking collapse and force the
indebted country out of the euro zone.
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With investors worried about a new bailout from the European Union
and a worsening economy, they have since fallen to roughly the level
they were at in 1990 and, while not as low as they were in 2012, are
some 52 percent down on last year's high.
Although Athens is in new bailout talks with its European Union
partners, the threat of political and economic instability remains
high.
And the banks, supported for the moment by the European Central
Bank, are in dire need of recapitalization, a subject being
discussed on Tuesday by the finance ministry and Greece's
international lenders.
It has been estimated by both Greek banks and the creditors that
between 10 billion and 25 billion euros ($11 billion-27.5 billion)
is needed.
The economy, meanwhile, has reversed course and is heading back into
recession.
On Monday, a survey showed Greek manufacturing activity plunged to a
record low as new orders plummeted and the three-week bank shutdown
caused serious supply problems.
Economic sentiment hit its lowest level in almost three years in
July, a report by the IOBE think tank showed.
(Editing by John Stonestreet)
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