Greek stocks close with record drop of 16 points

Bank stocks suffered the most, hitting or nearing the daily trading limit of a 30 percent loss. (Shuttersock)

Greece's stock exchange closed Monday with a record drop of 16.23 percent on reopening after a five-week shutdown caused by capital controls.

The general index settled at 668.06 points with the nation's outflow-hit banks and top corporations taking a beating.

The exchange's previous worst showing was in 1987 when the index had lost 15.03 percent.

The banking index on Monday lost nearly 30 percent, with the top four Greek lenders shedding the same amount, the maximum daily loss allowed.

Bourse officials said the selling spree was logical following the five-week shutdown and noted the situation could take a month to normalise.

"Pressure by sellers was high. It is logical and anticipated by everyone," stock market chairman Socrates Lazaridis told Bloomberg TV, noting that he expected the market to stabilise in a month's time.

"After five weeks of non-transacting ability, it was important to incorporate the changes that have taken place in the international environment of capital markets, and also on the local environment where there was a number of important changes," Lazaridis said.

The Athens Stock Exchange and Greek banks were closed on June 29, when controls on money withdrawals and transfers were imposed to prevent a collapse in the banking system due to a run on deposits.

Banks have since reopened, while maintaining strict withdrawal limits.

Greece is currently in intense negotiations with bailout lenders in an effort to negotiate the terms of a massive new rescue package in the next two weeks.

Negotiators from the European Union and International Monetary Fund are seeking faster cuts in early retirement plans set out by the government, and stricter conditions for a tax arrears payment program.

Prime Minister Alexis Tsipras is facing opposition to the new bailout from within his left-wing Syriza party that could force him to call an early election in the fall.

Last Update: Wednesday, 20 May 2020 KSA 09:48 - GMT 06:48