Greek stock market hits three-year low

Europe continues to dance to the tune of the Greek debt crisis on Thursday June 17th, but it seems that Greece’s own stock market is bearing the brunt of the pain.

The main ATG index fell around 3.5 per cent in early trading to hit a fresh three-year low, extending its recent collapse. Since Thursday, the Athens market has tumbled nearly 20 per cent of its value.

Meanwhile, other European stock markets are also feeling the effects of uncertainty. Germany’s DAX was almost down by 1.2 per cent, the French CAC 40 shed more than 1.3 per cent and the Euro Stoxx 50 was over 1.1 per cent in the red. Elsewhere, the UK’s FTSE-100 had lost around 0.6 per cent.

Eurozone finance ministers are due to meet later today, but there’s little expectation that an agreement might be reached that would prevent the heavily indebted nation of Greece from defaulting at the end of June.

Belgium’s finance minister, Johan Van Overtveldt, commented that it “all depends” on the proposals of Greece, saying: “We’ll see what they bring to the table. I don’t know what Mr Varoufakis is coming up with. If there are reasonable proposals we will discuss them.”

European markets await the outcome of the Eurogroup meeting, however, US markets may take their impetus from last night’s Federal Reserve meeting. At the meeting, Fed chair Janet Yellen downplayed expectations for a coming interest rate hike when she noted that dollar strength is holding back the US economic recovery. 

“I think we have seen that it’s [a strong dollar] had a negative effect on net exports and so served as a something of a drag on the economy, and probably that drag is going to continue for some time to come,” said Ms Yellen.

However, while not providing a clear indication of the timing for its first rate hike since 2006, Ms Yellen did note that “in spite of the appreciation of the dollar, [the Fed] obviously thinks that the economy is likely to do well enough to call, likely call, for some tightening later this year”.