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Greek stock market collapses after government gambles and early elections loom

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Greek stock market collapses after government gambles and early elections loom

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The risk of early parliamentary elections in Greece, possibly as soon as January following Prime Minister Samara’s decision to dash for an early presidential election, has sent a shockwave through the stock market.

It had its worst day since 1987, seeing 12.8 percent wiped off share values as investors ran to sell out.

“So if you have an international investor in the country you are exposed to and it’s going into elections or there is a possibility that the country will go into elections and you don’t know the final outcome, then the easiest decision you can make is just to sell and get out,” said Theodore Krintas, financial analyst, Attica Wealth Management:

Ten-year bond yields rose half a percent on the news, which carries the risk that parliament will not agree on a new Head of State, and this would trigger an election at a time the leftwing Syriza opposition is riding high in the polls. A Syriza government would likely renegotiate much of Greece’s imposed austerity package.

“Traders in Athens talk about a “Black Tuesday” that led to the biggest daily fall since 1987. Investors think the government decided to gamble by bringing forward the presidential election and now they are looking for a way out of the Greek market,” says euronews’ Symela Touchtidou, in Athens.