Photo: The banking index on the Greek stock market fell 30 per cent. (AFP: Aris Messinis)
Greece's stock market plunged nearly 23 per cent at the open on Monday, after a five-week shutdown brought on by fears the country was about to be dumped from the Eurozone.
One fund manager described it as "herd behaviour" and said few people were buying.
The main Athens stock index ended down 16.2 per cent after an initial plunge that was larger than any one-day loss ever experienced on the bourse.
By contrast, the broad European FTSEurofirst 300 index gained slightly.
Banking shares, which make up about 20 per cent of the Greece index, were particularly hard hit.
National Bank of Greece, the country's largest commercial bank, was down 30 per cent, the daily volatility limit.
The overall banking index was also down to its 30 per cent limit.
Bank shares look like they have more room to slide on Tuesday before bids emerge. It will take a few days for the market to balance out.
Greece's banks have seen deposits severely depleted as Greeks have withdrawn their euros for fear they would be forcibly converted into a new drachma outside the Eurozone.
The banks have been propped up by emergency money from the European Central Bank.
"Bank shares look like they have more room to slide on Tuesday before bids emerge," said one fund manager, who declined to be named.
"It will take a few days for the market to balance out."
Greece and lenders agree on pension reform dates
In the latest development in negotiations with creditors, Greece and its lenders agreed on Monday that new pension reforms would not affect those who were eligible to retire by the end of June, labour ministry officials said.
Athens has committed to implementing ambitious pension reforms — such as scrapping early retirement and raising the retirement age limit by the end October.
As bank stocks plunged, some companies performed better than expected, mainly those with exposure abroad, although they still fell.
Greece's biggest telecoms operator OTE, along with jeweller Folli Follie and aluminium producer Mytilineos, which are mainly exporters, saw their initial losses ease.
"Non-financial companies will have a better performance than the banks, since their prospects are brighter and are less exposed to the domestic market," Manos Chatzidakis, an analyst at Beta Securities, said.
Trading on the Athens bourse was suspended in late June as part of capital controls imposed to stem a debilitating outflow of euros that threatened to collapse Greece's banks and hurl the indebted country out of the Eurozone.
Since then, Athens has agreed on a framework bailout plan with its European Union partners in exchange for stringent reforms and budget austerity.
But implementation of the deal is some way off, keeping alive the threat of political and economic instability.
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.
Greece's economic sentiment also hit its lowest level in almost three years in July, a monthly report by the IOBE think tank showed.
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