Greek bank shares plunge for third day, stock market down 1.3%

A man walks under an electronic board showing share prices at the Stock Exchange in Athens, Greece, on Aug 4, 2015.
A man walks under an electronic board showing share prices at the Stock Exchange in Athens, Greece, on Aug 4, 2015.PHOTO: EPA

ATHENS (REUTERS) - Greek bank shares sold off sharply for the third day in a row on Wednesday, but losses were far less than in the previous sessions.

The main bank sector share index was down 20.3 per cent after losing around 30 per cent on Monday and Tuesday. It meant some buyers had come into the market.

The broader market reversed small opening gains to trade 2.3 per cent lower, dragged down by the banks which comprise about 20 per cent of the main index.

About half of the bourse's 25 blue-chip shares were up on the day.

"The market is looking for the bottom, we are not far away from it," said Alexander Moraitakis, head of Athens-based Nuntius Securities. "But bank shares are still pounded by selling pressure due to dilution fears, given their need to recapitalizes," he said.

Greek banks are in dire need of recapitalisation after a flight of euros from deposits for most of this year and mounting loan impairments. But such recapitalisation, when it comes, will hurt existing shareholders.

Tuesday's nearly 30 per cent plunge wiped out 2.65 billion euros of their market value - more than enough to fully buy out Piraeus Bank and Eurobank - two of the country's largest lenders.