ATHENS • The Athens stock exchange slipped further yesterday, weighed down by bank shares, as Finance Minister Euclid Tsakalotos prepared for a new round of talks with Greece's creditors on the terms of a mammoth new bailout.
In early afternoon trading, the Athex index was down 1.26 per cent after suffering its steepest fall of 16.32 per cent on Monday, when trading resumed after a five-week shutdown due to the country's debt crisis.
Banking shares were again the worst hit, as the Athex suffered its worst drop in nearly 30 years, highlighting investor anxiety even after a new rescue deal worth up to €86 billion (S$130 billion) over three years was agreed last month.The previous worst loss in Greek stock market history was a 15.03 percent plunge in 1987.
Senior European Union and International Monetary Fund auditors kicked off talks with Greek ministers a week ago to finalise the terms of the new bailout deal.
CMC Markets analyst Michael Hewson predicted that the new rescue package will have to be "well above the €86 billion numbers being bandied about which, in turn, is likely to make any discussion about debt relief even more contentious".
Greece also faces a Aug 20 repayment deadline of €3.2 billion to the European Central Bank and if the bailout talks grow tense, the banks may "come under further pressure", he said.
A government spokesman said the talks will shift to a "second phase" where the two sides will begin to actually draft the accord, which will be concluded on Aug 18.