Now Sovereign Risk Fears Plunge Stock Market in Greece

From Bloomberg:

Greek stocks plunged [on Thanksgivingday], posting their biggest loss in more than a year and dragging the country’s benchmark index into a so-called bear market, as shares in the nation’s lenders slumped.

The ASE Index fell 6.2 percent to 2,225.32 at the close in Athens, the worst performer among 18 western European benchmarks. The gauge extended its fall from last month’s high to 23 percent. A bear market is generally defined as a drop of more than 20 percent. The FTSE/ASE 20 Index of the country’s biggest companies slipped 7.3 percent to 1,153.29. The Cypriot General Index plummeted 11.4 percent to 1,432.3.

European stocks slumped today the most in seven months after Dubai’s attempt to reschedule its debt rattled investors from Shanghai to London. Greek stocks have fallen from their peak this year on Oct. 14 on wider concerns about the country’s economy. EU finance ministers will reprimand Greece next week for failing to take “credible and sustainable” measures to reduce its budget deficit toward the EU limit of 3 percent of output, a draft document shows.

“There is sovereign risk in Greece that is spilling over to corporate risk,” said Francisco Salvador, co-strategist at Dexia Iberian equities in Madrid. “The public deficit and macro situation is worrying not only European authorities but investors too.”

Read the entire report here.