Econintersect: It may have been a holiday in New York but there was a celebration of a different kind Monday 28 May 2012 in Athens. The Greek stock market surged to an advance of nearly 7%. This follows the historic collapse of the Athen Index Compos by 90.9% since the autumn of 2007. The index had an intraday high of 5,346.04 on 7 November 2007 and hit an intraday low of 485.18 just last Friday, 25 May 2012. The loss is the same to one decimal place whether intraday or daily closing prices are used. Greece was alone in a big move in stocks as the other European markets were narrowly mixed. Only Brussels saw a move larger than 1% with an advance 0f 1.2%. Vienna, Paris, Frankfort and Prague were fractionally lower. London and Stockholm were nearly unchanged.
Zero Hedge said there was absolutely no reason for the big move. The Associated Press said that several poll results published Sunday raised hopes that the pro-bailout New Democracy Party would win the next Greek elections in June. The bail-out process requires that Greece continue with the severe austerity program imposed by Brussels and would result in the country remaining in the Eurozone. In recent weeks the expectation had been that the anti-austerity radical left Syriza Party would win the elections and Greece would be forced to leave the euro.
In the five-year chart below the more than 90% decline in Greek stocks is displayed. The surge in the market Monday will not be seen on such a graph. The 33.31 point gain (6.87%) is only 0.6% of the chart vertical scale – that’s just 1 part out of 167.
Click on chart for larger image.
- Greece Jumps Most in 8 Months As Rest of Peripheral Europe Slumps (Tyler Durden, Zero Hedge, 28 May 2012)
- Greek stocks soar on pro-bailout party’s poll gain (Associated Press, The News Tribune, 28 May 2012)