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Athens Stock Exchange Rebounds After Election Results

What seemed like a destabilizing result early last night after local elections exit polls came out, was turned around, leading the Greek stock market to a recovery, after last week's tumble down.

 

Financial analysts must have been frantic after the early exit polls from last night's local elections came out, showing a clear SYRIZA lead in Athens and the Attica region. Investors are notoriously scared of potential political change, so when revisions of the initial estimates came through and the new day came, things certainly normalized.

The Athens stock market was up 0.9% in the afternoon trade after rising as much as 3.4% earlier on Monday, with traders saying the results were not a knock-out blow to the government as feared.

"It's not as disappointing as the market had discounted at the end of last week," said Takis Zamanis, a trader at Athens-based brokerage Beta Securities. "This result doesn't seem to be threatening the government's stability."

Yields on 10-year Greek government bonds were down 10 basis points to 6.68%. Investors are closely watching the outcome of next week's EU vote to see if it ushers in a new bout of political instability in Greece that dashes a feeble recovery taking root in the country after six years of recession.

Polls have largely shown SYRIZA with a narrow lead over Samaras's conservative New Democracy party for the EU vote, though one poll published on Sunday by Kapa Research showed SYRIZA with a nearly 5 point lead over the ruling party.